The Indian rupee was weaker on Friday to close at 87.53 per US dollar as investors got jittery in anticipation of Federal Reserve Chair Jerome Powell’s speech at the upcoming Jackson Hole symposium. Its domestic currency (Rupee) dipped 25 paise, and this is the third successive decline. The current financial year data shows a decline of 2.35 per cent and 2.19 per cent in the year 2025, but that of August went up by 0.03 percent as per the data.
According to the market analysts, the rupee weakness was caused due to both domestic and international uncertainties. A potential anchor of sentiment is the deadline on an additional 25% tariff by the US on Indian exports on August 27. India has retained its stance that it will keep on buying Russian oil despite the pressure exerted by the US. Interestingly, however, India got some diplomatic support in regard to China, which wrote that it “strongly supports” New Delhi in opposition to the Washington tariffs increase.
The attentiveness of people now lies on what Powell would say, which could be heard at 10 AM New York time on Friday. Investors will be eyeing any indication of the direction of the Fed policy going forward, with a rate cut now fully priced into markets by September.
Throughout, the Reserve Bank of India (RBI) carried out an overnight variable rate repo (VRR) auction on the same day (Thursday). The total bids that the central bank has received were 31,025 crore against the notified 50,000 crore, indicating tight liquidity conditions.
In the international market, the US dollar index that tracks the greenback against six other major currencies rose by 0.11 percent, to 98.72, to further mount pressure on the emerging market currencies, including the rupee.
On the oil product front, crude oil prices were expected to increase weekly, with no positive results of the peace talks between Russia and Ukraine.
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