Rupee hits a new low of 88.45 against dollar amid trade turmoil

MUMBAI: The rupee closed weaker on Thursday, settling at 88.44 against the dollar, compared with 88.10 in the previous session, marking a fresh record low. The currency opened at 88.12, touched a high of 88.09 and a low of 88.45 during the day, slipping past its earlier low of 88.36 hit last week.

The decline comes amid persistent foreign outflows of over $11 billion this year and mounting pressure from US tariffs, which have dented investor confidence and clouded India's trade outlook. Exporters remain uncertain about order flows while importers are hedging more aggressively, intensifying demand for dollars.

Traders said RBI has been intervening by selling dollars to smooth volatility but is not defending any particular level. The rupee's weakness contrasts with most regional peers, which have found support from expectations of a Fed rate cut. However, sentiment around the Indian currency remains fragile, with tariff pressures on labour-intensive sectors likely to keep it under strain.

"Rupee traded weak by 0.35% at 88.40 as mixed FII flows and a firmer dollar index kept pressure intact. Focus remains on the US CPI data, which could drive volatility in the dollar and in turn the rupee," said Jateen Trivedi, VP research analyst, LKP Securities.