Rupee falls 18 paise to 87.76 against US dollar in early trade

The rupee depreciated 18 paise to 87.76 against the US dollar in early trade on Friday (August 29), weighed down by persistent foreign fund outflows and month-end dollar demand.

Forex traders said the rupee is under persistent pressure as the weakness from Trump tariffs was being countered by a softer US dollar, giving the local currency some much-needed breathing space.

At the interbank foreign exchange market, the rupee opened at 87.73 against the US dollar, then fell to 87.76, registering a decline of 18 paise over its previous close.

On Thursday (August 28), the rupee rose by 11 paise to close at 87.58 against the US dollar.

”Market sentiment remains fragile due to the impact of US tariffs and selling by FPIs to the tune of ₹34,733 crore of Indian equities in August 2025,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

The US tariffs are expected to weaken Indian exports to the US and deepen the trade deficit and put strain on the rupee, further pressurising import costs and thus fueling domestic inflation, Bhansali said.

The rupee opened a tad weaker and is likely to stay in the range of 87.40-87.90 for the day, with a close watch on RBI selling dollars to protect the rupee.

The Reserve Bank of India, in its latest bulletin on Thursday (August 28), said persisting uncertainties related to the US trade policies pose downside risk to the overall demand in the Indian economy, while the inflation outlook for the near-term has become more benign than anticipated earlier.

Meanwhile, the government is working on extending support measures for exporters, such as the rollout of export promotion missions, and a moratorium on loans to help them insulate from the impact of the US’s 50% tariffs on Indian goods, according to an official.

The government official also said this is a wake-up call and an opportunity to diversify the export basket.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.18% to 97.99.

Brent crude, the global oil benchmark, was trading 0.66% lower to $68.17 per barrel in futures trade, On the domestic equity market front, the Sensex climbed 197.11 points to 80,277.68, while the Nifty was trading up 63.45 points to 24,564.35.

Foreign Institutional Investors offloaded equities worth ₹3,856.51 crore on Thursday, according to exchange data.