Rupee Hits New Record Low Against US Dollar Amid Trade Concerns; Steady Against UAE Dirham
Mumbai — The Indian rupee weakened slightly on Monday, closing at a fresh record low of 88.10 against the US dollar, pressured by uncertainties around the Indo-US trade deal and increased demand for the dollar by importers. During early trading, the rupee touched an intra-day low of 88.33, reflecting persistent foreign fund outflows and concerns over additional US tariffs on Indian goods, which have raised worries about India’s trade deficit.
The rupee had first crossed the 88 per dollar level last Friday, closing at 88.09, and despite some resilience during domestic equity market gains, the currency remained under pressure. The benchmark Sensex surged 554.84 points to 80,364.49, and the Nifty index rose by 198.20 points to 24,625.05. Meanwhile, the broader dollar index weakened slightly by 0.14%, supporting the rupee from falling even further.
Market experts suggest that the dollar may continue to weaken, which could increase chances of a US Federal Reserve rate cut this month. However, concerns remain over the trade tariffs and foreign institutional investor (FII) outflows, which saw equities worth Rs 1,429.71 crore sold on Monday. Additionally, crude oil prices increased by nearly 1% to USD 68.15 per barrel, adding to the rupee’s pressure.
The Reserve Bank of India (RBI) recently reported a decline in the country’s foreign exchange reserves by USD 4.386 billion to USD 690.72 billion, following a previous week’s rise. In contrast, domestic manufacturing activity showed strength, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) improving to 59.3 in August, marking the fastest pace of expansion in over 17 years due to higher production efficiency and robust demand.
Against the UAE dirham, the rupee remained relatively steady, trading around 0.0417 AED for 1 INR as of September 2, 2025. This reflects a consistent exchange rate, with the rupee showing only slight fluctuations in recent weeks. The ongoing trade tensions with the US may continue to influence the rupee’s performance against both currencies.
Overall, the rupee faces a slight negative bias given trade uncertainties with the US, crude oil price increases, and FII selling, despite some positive domestic economic signals. The USD/INR rate is expected to fluctuate between 87.85 and 88.50 in the near term.
Source: PTI, Wise.com, Central Bank UAE, and exchange data for currency rates.
(Note: All exchange rates are as of early September 2025 and reflect the latest available data.)
