The rupee recovered 14 paise from its all-time low to 87.66 against the US dollar in early trade on Thursday on suspected RBI intervention, after US President Donald Trump’s tariffs of 25 per cent and the penalty for buying Russian Crude and Arms.
Forex traders said the rupee, which plunged 89 paise, logging its steepest single-day fall in over three years, recovered some lost ground but is trading with a negative bias.
At the interbank foreign exchange, the rupee opened at 87.66, then touched an early low of 87.74 against the US dollar.
On Wednesday, the rupee closed at an all-time low of 87.80 against the US dollar after America announced a sweeping 25 per cent tariff on Indian imports in the absence of a trade deal ahead of the August 1 deadline.
"The rupee which is already down by more than 3 per cent since the start of the year after reaching a high of 83.75 in the month of April continued to fall on the news of Trump’s tariffs of 25 per cent and the penalty for buying Russian Crude and Arms," said Anil Kumar Bhansali Head of Treasury and Executive DirectorFinrex Treasury Advisors LLP.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.03 per cent to 99.78.
Brent oil prices fell 0.19 per cent to USD 73.10 per barrel.
Meanwhile, the US FED held interest rates steady and signalled it is too early to consider rate cuts, which has supported the dollar throughout the month of July.
"With the RBI controlling the rupee intermittently and oil companies on a buying spree of US dollars before the Trump tariffs on Russia are in place after about 10 days, the rupee was unable to make any headway…, " Bhansali added.
In the domestic equity market, Sensex declined 582.49 points or 0.71 per cent to 80,899.37 while Nifty fell 151.70 points or 0.61 per cent to 24,802.45.
Foreign institutional investors (FIIs) offloaded equities worth Rs 850.04 crore on a net basis on Wednesday, according to exchange data.
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