New Delhi [India], August 5 : The Indian Rupee continued to weaken on Tuesday as it came under pressure due to continuous dollar demand from importers and persistent foreign institutional investor (FII) outflows.
Currency experts highlighted that the situation has been further aggravated by the uncertainty around US tariffs and possible penalties related to India's continued crude oil imports from Russia.
In an exclusive conversation with ANI, experts noted that there is still no clarity on the nature or extent of the penalties that might be imposed by US President Donald Trump. The lack of details has added to the uncertain environment in the currency market.
KN Dey, a currency expert told"The Rupee is still in the middle of a storm, trading now at 87.80/81. Interventions from RBI continue, otherwise the Rupee might have breached the 88 level today,".
He added, "There is continuous demand for dollars from importers as well as due to FII outflows. Inflows have slowed down on anticipation of a weaker Rupee ahead. I think this uncertainty will continue for some more time till we see some clarity coming in."
The Rupee opened weak today amid the threat of higher tariffs by President Donald Trump. The Rupee opened at 87.85 against the US Dollar, touched a high of 88.1, and slipped to a low of 87.75 during the trading session.
At the time of filing this report, the currency was trading at 87.82 per dollar.
Adding to the commentary, Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, said, "Despite minor strength in the dollar index, the key drag remains the 25 per cent tariff imposed by the US, which has kept pressure on the rupee. The early gains were quickly sold into, reflecting persistent bearish sentiment."
He further noted that the markets are now waiting for the Reserve Bank of India's monetary policy announcement on Wednesday, which is expected to bring heightened volatility.
Experts outlined that unless there is some clarity on the US penalties and an improvement in capital inflows, the Rupee may remain under stress in the near future.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor