- Indian rupee opened 5 paise stronger at 87.68 against the US dollar on Thursday
- US imposed an additional 25% tariff on India for purchasing Russian crude oil
- Brent oil prices rose to $67.52 per barrel following the tariff announcement
The Indian rupee strengthened at the open on Thursday after United States President Donald Trump slapped an additional 25% tariff on India for the purchase of Russian crude oil on Wednesday.
The local currency opened 5 paise stronger at 87.68 against the US dollar on Wednesday compared to its closing at 87.73 against a dollar on Tuesday.
The range for the day is expected to be between 87.25 and 88, said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
The Indian rupee is expected to open a tad higher at 87.70 after the market found Trump raised the tariffs by just 25 bps on buying Russian oil, while the market expected a higher raise, Bhansali shared.
"Still, any rise will surely affect the Indian exports to the US, though the 25 basis point hike will be effective only from August 28, before which the US delegation is expected into India to negotiate on tariffs," he added.
He advised exporters to hedge their exports, and any dips will be a good buy for importers for the moment to hedge their 1-week payables.
Brent oil prices jumped higher to $67.52 per barrel after Trump hiked India's tariffs by 25%, betting on tighter supplies. The Trump hike was in retaliation to buying Russian oil and thus funding Russia's war against Ukraine.
"Crude prices also benefitted from some bargain buying after sinking to 2-month lows on Wednesday amid persistent concerns over higher OPEC+ production and worsening demand across the globe," he added.
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