Rupee falls 28 paise to close at 87.46 against U.S. dollar

The depreciated 28 paise to close at 87.46 (provisional) against the U.S. dollar on Friday (February 28, 2025), as the strength of the American currency and a negative trend in domestic equities dented investor sentiments.

Forex traders said the ongoing uncertainty surrounding tariff imposition by the U.S. has left financial markets in flux. Moreover, the tariff chaos has injected volatility and uncertainty into the U.S. Dollar Index.

At the interbank foreign exchange, the rupee opened at 87.32 against the greenback. During the session it fell to an intra-day low of 87.53 before ending the session at 87.46 (provisional) against the dollar, logging a loss of 28 paise from its previous close.

On Thursday (February 27, 2025), the rupee settled almost flat with a marginal gain of 1 paisa at 87.18 against U.S. dollar.

Elevated greenback against major crosses and sustained FII outflows also contributed to the decline in the domestic unit, forex traders said.

Besides, month-end dollar demand by importers amid uncertainty over U.S. trade tariffs also boosted the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08% higher at 107.33.

Brent crude, the global oil benchmark, fell 0.74% to $73.49 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 1,414.33 points, or 1.90%, to settle at 73,198.10, while the Nifty fell 420.35 points, or 1.86%, to 22,124.70 points.

Meanwhile, the Reserve Bank of India (RBI) on Friday (February 28, 2025) conducted U.S. dollar-rupee swap worth $10 billion for injecting long term liquidity in the system, with the auction eliciting robust demand. The settlement of auction will take place on March 4 and March 6.

Under the swap exercise, a bank shall sell U.S. dollars to the RBI and simultaneously agree to buy the same amount of U.S. dollars at the end of the swap period.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹556.56 crore in the capital markets on net basis on Thursday (February 27, 2025), according to exchange data.

On the global front, President Donald Trump plans to impose tariffs on Canada and Mexico starting Tuesday (February 25, 2025), in addition to doubling the 10% universal tariff charged on imports from China.

The prospect of escalating tariffs has already thrown the global economy into turmoil - with consumers expressing fears about inflation worsening.