Rupee drops below 87 mark against dollar on crude rise, trade worries

The rupee slipped below the 87 mark against the US dollar in early trade on Wednesday (July 30) as higher crude oil prices and concerns over the India-US trade deal weighed on sentiment.

At the interbank forex market, the rupee opened weaker and touched an early low of 87.15 per dollar, down 24 paise from its previous close. The local unit had ended at 86.91 on Tuesday (July 29), its weakest level in over four months.

Month-end dollar demand from importers and persistent foreign fund outflows added pressure on the rupee, traders said.

Brent crude rose 0.11% to $72.59 per barrel as supply concerns resurfaced after US President Donald Trump warned of new tariffs on Russia’s secondary oil buyers.

Trump also confirmed that the India-US trade deal is not yet finalised. He signalled that India could face tariffs between 20% and 25% if talks don’t progress, adding to market uncertainty.

A US team will visit India on August 25 for the next round of talks, but both sides are working to iron out an interim deal before the August 1 deadline, which marks the end of the current suspension of US tariffs on India.

Indian exporters could face an extra 16% duty on top of the current 10% if no deal is reached.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said, “With the US trade deal deadline approaching and key US data lined up this week, the forex market is expected to remain highly volatile. The rupee is likely to trade in a broader range of 86.45–87.25.”

Meanwhile, the Sensex rose 126.27 points to 81,464.22, while the Nifty gained 45.90 points to 24,867.00. Foreign investors sold shares worth ₹4,636.60 crore on Tuesday.

Some dollar sales by state-run banks, likely on behalf of the RBI, helped limit the rupee’s fall, traders said.

-With agencies inputs