Indian rupee gained 12 paise to finish at 87.53 (provisional) against the US dollar on Friday as lower crude oil prices and the suspected interventions by the Reserve Bank of India (RBI) helped the rupee to rise. These are signs of a small comeback as the world sees an increase in trade tensions after US President Donald Trump imposed wide-ranging new tariffs on Indian exports, leading to fears of greater disturbance of global trade patterns.
Forex traders observed that risk-off mood within the markets has been created following the active implementation of a 25 per cent tariff on Indian exports by the United States, leading to greater fears of the rupee weakening against other currencies in the coming days. The new tariff steps were announced by Trump on Wednesday, where he referred to the arms and oil purchases by India from Russia as one of the minor factors. Although the tariff deadline was first scheduled to be implemented on August 1, it is now scheduled to be implemented on August 7.
Meanwhile, in the interbank foreign exchange market on Friday, the rupee started at 87.60 against the greenback and gained to reach 87.20 at its peak and then closed at 87.53. This was indicative of a marginal gain as compared to the previous day’s close of 87.65, when the rupee had gained 15 paise relative to its previous all-time low.
The markets in the entire world also had an influence on how the currency would move. The greenback’s strength against six major currencies as measured by the dollar index increased by 0.26 per cent to 100.23, as no safe-haven currencies were in demand. In the meantime, the prices of Brent crude oil decreased by 0.31 per cent to USD 71.48 per barrel as traders evaluated how the surge in the tariffs in the United States would affect the vitality of economic activity and fuel demand worldwide.
In local bourses, the equity indices ended in red with the BSE Sensex declining 585.67 points to end the day at 80,599.91 and the Nifty 50 falling 203 points to close at 24,565.35.
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