Indian rupee sinks to record low against US dollar amid tariff fears

The Indian rupee has fallen to an all-time low in comparison to the US dollar on August 29th, according to The National via Reuters. This is following tariffs imposed by the US on Indian goods, with the fear of further tariffs being potentially enforced looming.

The rupee fell to a record of 88.3075 versus the dollar during intraday trading, before falling to 0.65 per cent lower to 88.1950. This is its biggest one-day loss since May, and the first time the currency has breached the 88-rupee-per-dollar mark. Additionally, this decline marks the fourth month straight that the rupee has fallen against the dollar.

On August 6th, Trump signed an executive order that doubled tariffs to India from 25% to 50%. This was enforced on August 27th, and is the highest for any Asian country. Trump did this to punish New Delhi for Russian oil imports. His actions have caused a considerate amount of concern for India’s domestic economy, with consumers and businesses wary of the negative impact of the order.

“The rupee’s sharp volatility against the US dollar in recent months – in the backdrop of continuing geopolitical uncertainties – is set to dent the earnings of some sectors by up to 250 basis points in fiscal 2026,” according to a note from analysts at Crisil Ratings, a credit rating agency in Mumbai. The firm had also predicted that the Indian currency would settle at about 88 rupees by the end of India’s fiscal 2026 year, which ends on March 31st.

“The extent of impact will depend on the exposure to foreign trade, ability to pass on the cost increase and hedging practices. There might also be player-specific impact across sectors based on the extent of unhedged foreign currency debt exposure,” they added.

India’s stock market benchmarks experienced the impact of the tariffs also. The Bombay Stock Exchange Sensex finished 0.34 per cent lower to post a 1.7 per cent decline for August, and the Nifty 50 retreated 0.3 per cent for a 1.4 per cent monthly drop.