The Indian rupee opened stronger on Monday, amid additional 25 per cent tariff proposed by US President Donald Trump on India, which is set to take effect from August 27.
The rupee likely inched up higher on optimism that the Russia-Ukraine war will end following the upcoming US-Russia negotiations on August 15, leading to removal of additional tariffs on India.
The local currency opened 13 paise stronger at 87.53 against the US dollar up from 87.66 on Friday. The immediate trading range is expected to be between 87.25 and 87.80, according to analysts.
The Indian rupee was expected to open with small gains today at 87.51, while markets are awaiting US and domestic inflation data. Indian markets are focused on domestic CPI and WPI inflation data, set to be released on August 12 and August 14.
Additional tariffs, if implemented, are expected to put pressure on the Indian rupee against the US dollar in the short term due to reduced export revenues, capital outflows, and inflationary pressures.
New US tariffs on India are expected to affect sectors such as textiles, leather, and seafood. India criticised the tariffs, calling it “unfair and unreasonable”. US has singled out India for tariff rate of 50 per cent, compared to 30 per cent for China and 15 per cent for Turkey, despite all three countries importing Russian oil.
Brent oil prices dropped to $66.25 per barrel in Asian trade on Monday morning, continuing last week’s significant declines as traders anticipated upcoming talks between Russia and the US will ease the Ukraine conflict.
China released soft inflation data and economic indicators in July, indicating that the economy was recovering slowly, leaving oil markets largely pessimistic about future demand.
FII selling persisted during the week in Indian equity markets, indicating broader risk aversion in emerging markets. However, ongoing purchases by DIIs helped mitigate losses.
(IANS)
