The Indian rupee opened 5 paise higher at 88.1075 per US dollar on September 5, supported by a softer greenback as global traders bet on a potential US Federal Reserve rate cut. The currency had closed at 88.1525 in the previous session.
The Dollar Index, which measures the strength of the US dollar against six major currencies, slipped to 98.112 in early trade from the previous close of 98.347, giving emerging market currencies like the rupee some breathing space.
“Global uncertainty, mixed U.S. data, and potential Fed policy shifts could provide the rupee with some room for appreciation,” said Amit Pabari, Managing Director at CR Forex Advisors.
Despite the marginal gain, the rupee continues to underperform its Asian peers. Year-to-date in 2025, it has weakened by about 3%, while the Korean won and Chinese yuan have gained roughly 5.5% and 2%, respectively. Pabari highlighted that the lingering impact of Donald Trump’s tariffs continues to weigh on the Indian currency and the broader export sector.
A forex trader at a large foreign bank told Reuters, “USD/INR may try to move below 88, but that is expected to be short-lived due to strong client interest in buying on dips.”
Meanwhile, Indian exporters are stepping up pressure on the central bank for relief measures. A Bloomberg report on September 4 revealed that exporters plan to lobby for permission to temporarily convert their US earnings at a rate 15% weaker than the current rupee value, around 103 per dollar, to cushion the hit from U.S. tariffs.
Pankaj Chadha, Chairman of the Engineering Export Promotion Council of India, said in a telephonic interview that such measures are necessary to safeguard exporters from mounting losses.
The rupee remains near its record low of 88.33 per dollar, and its trajectory will likely hinge on global market cues, U.S. monetary policy, and domestic support for exporters battling tariff pressures.