Rupee Falls to 4-Month Low on Trump’s Tariff Remarks, RBI Seen Limiting Losses

The Indian rupee weakened sharply on July 30, slipping to 87.24 per US dollar—its lowest level since March 13, 2025—amid renewed trade tensions following remarks from former US President Donald Trump.

Trump hinted at imposing 20–25% tariffs on Indian exports, a rate higher than what was offered to the UK, EU, and Japan. The comments rattled currency markets, triggering a slide in the rupee which opened at 87.12 and extended losses to 87.24 by 11:30 am, according to Bloomberg data.

Trade Deal Uncertainty Fuels Pressure

The US and India are in ongoing negotiations over a Bilateral Trade Agreement (BTA), but no deal has been finalized yet. Trump’s proposed tariffs are expected to take effect from August 1, once the current pause on duties ends. A US delegation is expected in India mid-August for the next round of talks, with the goal of finalizing the first tranche of the BTA by September or October.

Speaking to reporters, Trump said,

“India has charged basically more tariffs than almost any other country… you just can’t do that.”

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RBI Intervention Likely Helped Limit Losses

Despite the slide, Reuters reported that the Reserve Bank of India (RBI) may have stepped in to curb volatility in the forex market. According to a forex salesperson quoted in the report,

“Expect RBI to continue smoothening volatility while chances of firm intervention to lift the currency are low due to the uncertain environment.”

Brent Crude Adds to Downside Pressure

The rupee was further pressured by rising global oil prices. Brent crude climbed to a five-week high of $72.54 per barrel, driven by geopolitical tensions and Trump’s ultimatum to Russia on ending the Ukraine conflict.

Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, said,

“Oil prices rose more than 3% and remained firm around $71.76 as supply concerns grew after Trump’s 10–12 day deadline for progress on Ukraine.”

Quick Market Outlook

According to Jateen Trivedi, VP Research at LKP Securities, the rupee is likely to trade in a broader range of 86.45–87.25 in the near term. Market participants will closely watch geopolitical developments and the next round of US-India trade talks for further direction.