Mumbai, Feb 5, 2025: The Indian rupee opened on a flat note in early Wednesday and slid 9 paise to 87.16 against the US dollar a day after the collapse of US-China trade talks, a global risk aversion hence on investors.
The Indian rupee opened at 87.13 and edged lower to 87.16 in trade, compared with the previous day’s close of 87.07. Forex traders attributed the rupee’s weakness to market uncertainty regarding tariffs brought on by the United States and China. However, there could be some support from Indian markets, should the Reserve Bank of India (RBI) intervene.
On Tuesday, the rupee lost 4 paise over the previous all-time low, and experts are of the view that this currency will trade between 86.90 and 87.25 levels in the immediate term. “The trade war is on hold as of now, anxiously awaiting Donald Trump’s comments on Europe’s exports and their currency manager policies,” said Anil Kumar Bhansali Head of Treasury Finrex Treasury Advisors LLP.
The US government has imposed tariffs of 10% on imports from China, which has led to retaliation by Beijing in the form of tariffs on certain US goods and a Google antitrust investigation. At the same time, the dollar index was at 107.89, which is a decrease of 0.06%. The price of Brent crude oil also dipped 0.50%, landing at USD 75.82 per barrel.
Market participants remain cautious ahead of the RBI’s Monetary Policy Committee (MPC) meeting, which begins on February 5, with key policy decisions set to be announced on February 7. Additionally, Mr. Trump has delayed new tariffs on Mexico and Canada for 30 days following border enforcement commitments from both countries.
Subscribe to Questiqa.in and Questiqa Bharat for more.