Quote on Rupee 29th August 2025 by Anindya Banerjee, Head of Currency and Commodity, Kotak Securities
Below the Quote on Rupee 29th August 2025 by Anindya Banerjee, Head of Currency and Commodity, Kotak Securities
The rupee slipped to a fresh all-time low today, with USD/INR spot at 88.21, down 59 paise intraday, after touching a high of 88.31.
The weakness is being driven by the India–US trade war, which continues to weigh on sentiment. There has been steady hedging demand from importers, coupled with FPI outflows from both debt and equity. Corporate outflows also added pressure, while stop-loss orders were triggered once USD/INR crossed 87.60 and later the 88.00 level.
The rupee remains undervalued relative to its emerging market peers, but near-term direction will likely stay under pressure due to trade war concerns. The RBI is expected to intervene if spot approaches 88.50, though a sustained reversal would require a rollback of the additional US tariffs.
From a technical perspective, USD/INR has given a bullish breakout above 87.50, opening up room for a move towards 89.00, and possibly 89.50 in the short term.
A weaker currency acts as a cushion for exporters facing tariff challenges, effectively working as a stimulus to keep them competitive. Historically, whenever trade disputes with the US escalate, the currencies of affected countries have tended to depreciate against the dollar.
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