The Indian rupee ended at a record low on Friday, weighed down by foreign portfolio outflows, higher month-end oil demand, a stronger yuan, and renewed pressure from fresh US tariffs on Indian goods, currency experts said.
The domestic currency closed 57 paise weaker at 88.2063 against the US dollar, compared to 87.6963 at open and 87.6338 at the previous close. Earlier in the day, the rupee slipped to an all-time low of 88.29, breaching its previous lifetime low of 87.95 touched in February. Traders said the Reserve Bank of India intervened with dollar sales, helping the rupee recover marginally to 88.12 by afternoon trade.
The weakness in the rupee follows Washington’s move earlier this week to impose an additional 25 per cent tariff on Indian goods, doubling the total duties to 50 per cent. Economists warned that if the tariffs remain for a full year, they could shave off 60 to 80 basis points from India’s GDP growth. The economy is already showing signs of a slowdown, and the Reserve Bank of India expects growth at 6.5 per cent in the current financial year ending 31 March.
Analysts said the US tariffs will directly impact labour-intensive sectors such as textiles and jewellery, which are heavily export-dependent. Since Indian exports to the US account for 2.2 per cent of GDP, a slowdown in these industries could not only hurt growth but also cause job losses.
At the same time, equity and debt outflows have added to currency pressure. Foreign portfolio investors have pulled out USD 9.7 billion from Indian markets so far in 2025. Month-end demand for dollars from oil marketing companies also intensified the downward move, traders noted.
With Friday’s fall, the rupee has weakened by 3 per cent in 2025, making it the worst-performing Asian currency this year. The Indian currency also touched a record low against the Chinese yuan, highlighting broader weakness across trading pairs. Economists cautioned that the widening trade deficit and weak capital inflows could worsen India’s balance of payments situation if the US tariffs persist.
