The Indian rupee fell to a lifetime low on Friday, pressured by concerns over U.S. tariffs, although central bank intervention appeared to slow the decline. The currency slipped 0.14% to 88.2650 against the U.S. dollar, compared with 88.1450 in the previous session.

Friday’s decline ended a volatile week, with the rupee largely trading below the 88-mark. Losses were driven by portfolio outflows and uncertainty linked to U.S. trade measures. Washington imposed a 50% tariff on key Indian exports on August 27, citing India’s purchases of discounted Russian oil. The rupee dropped to 88.36 during the session, its lowest level on record, as foreign banks and oil companies purchased dollars and traders covered speculative positions.

Foreign portfolio investors have withdrawn US$1.4 billion from Indian equities so far in September, bringing total outflows for the year to more than US$16 billion. Traders reported that the Reserve Bank of India intervened through state-run banks, selling dollars above the 88.30 mark. “Uncertainty around U.S. tariffs is still spooking the market even as the Indian government is devising ways to counter the impact,” said Apurva Swarup, vice president at Shinhan Bank, adding that market participants had expected support for the rupee at 88.70.

India is seeking to conclude a bilateral trade agreement with the U.S. by November. Meanwhile, other Asian currencies gained against the dollar ahead of expectations of a Federal Reserve rate cut this month, with the Korean won leading the advance. The dollar index stood 0.22% lower at 98.014, with traders awaiting U.S. nonfarm payroll data due later in the day.

Source: Reuters