The Indian Rupee closed weaker against the US Dollar on Monday, ending the session at Rs 85.99—down 19 paise from Friday's closing rate of Rs 85.80. The local currency faced early morning pressure and continued to struggle throughout the day amid a strengthening US dollar and persistent foreign fund outflows.
The downward move in the rupee coincides with renewed uncertainty in global trade dynamics. Market participants are reacting to the latest developments from Washington, where US President Donald Trump has announced a fresh 30% tariff on imports from the European Union and Mexico. This latest move follows a flurry of similar tariffs targeting countries including Canada, Brazil, and Algeria, adding to concerns across emerging markets.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, negotiations over possible tariff implications on Indian exports are still ongoing. “India remains outside the tariff bracket for now, but there is pressure until talks conclude,” Bhansali noted.
Additional strain came from foreign institutional investors, who recorded net equity sales worth Rs 5,104.22 crore on Friday. Meanwhile, strong US jobs data released earlier this month has shifted market consensus away from an immediate rate cut by the Federal Reserve, further reinforcing dollar strength and limiting room for rupee recovery.
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