The Indian rupee closed lower against the US dollar on Friday, depreciating by 28 paise to end at 87.46 (provisional). The strength of the US dollar and negative sentiment in domestic equities impacted the rupee’s performance.
Forex traders pointed to the ongoing uncertainty around US tariff imposition as a key factor driving market volatility. The tariff chaos has led to increased uncertainty in the US Dollar Index.
Starting at 87.32 against the dollar, the rupee dropped to an intra-day low of 87.53 before settling at 87.46 (provisional) by the end of the session. This marked a loss of 28 paise from its previous close, where it had settled at 87.18 against the US dollar.
The rupee’s decline was also influenced by the elevated greenback against major currencies and continued Foreign Institutional Investor (FII) outflows. Additionally, month-end dollar demands by importers, coupled with uncertainty over US trade tariffs, boosted the US dollar.
The dollar index, which measures the dollar’s strength against six major currencies, was up by 0.08 per cent at 107.33. In futures trade, Brent crude, the global oil benchmark, fell by 0.74 per cent to USD 73.49 per barrel.
On the domestic equity front, the BSE Sensex plunged by 1,414.33 points to close at 73,198.10, while the Nifty dropped by 420.35 points to 22,124.70 points.
In a move to inject long-term liquidity into the system, the Reserve Bank conducted a US dollar-rupee swap worth USD 10 billion. The auction saw strong demand, with settlement scheduled for March 4 and March 6.
Foreign Institutional Investors (FIIs) continued to offload equities worth ₹556.56 crore on a net basis on Thursday. Globally, President Donald Trump’s plans to impose tariffs on Canada and Mexico, as well as increase tariffs on imports from China, have added to economic uncertainty.
The escalating tariffs threat has rattled the global economy, with concerns about worsening inflation. Despite these challenges, the rupee’s performance against the dollar remains under pressure amid ongoing market volatility.
