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Rupee posts marginal gains amid tariff jitters; ends at 87.54/$
The domestic currency closed 6 paise higher at 87.54 against the dollar on Friday, according to Bloomberg. During the session, it rose to 87.23 levels, just a day after a record closing low. The currency depreciated by 2.14 per cent in July, the highest monthly fall since September 2023.
The latest US tariff tweak includes a base levy of 10 per cent and 15 per cent or higher rates for countries with trade surpluses with the US. However, Canada was hit with a 35 per cent tariff, while Mexico's was delayed by another 90 days. These new rates are set to take effect after midnight on August 7.
This episode came a day after Trump imposed a 25 per cent levy on Indian goods, and threatened further penalties for its imports of Russian energy. However, India remains firm on its Russia ties with a broad consensus on avoiding retaliation and resorting to negotiations.
The dollar index, the measure of the greenback against a basket of six major currencies, was up 0.25 per cent at 100.22.
Back home, the central government's fiscal deficit stood at 17.9 per cent of the full-year target at the end of June. It was at 8.4 per cent of the Budget Estimates (BE) of 2024-25 in the first three months of the previous financial year. This marks a sharp rise compared to 8.4 per cent in the same period last year, driven by slower tax collections and higher interest payments, analysts said.
If the Reserve Bank of India (RBI) continues to manage volatility, the rupee could strengthen toward the 87.00 level, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. However, sustained central bank presence will be key to keeping the currency within a narrow range.
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