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Rupee hovers near all-time low, likely to keep underperforming Asia
The rupee was quoting at 88.27 to the U.S. dollar, just shy of its lifetime low of 88.3075 hit on Aug. 29.
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Reuters - Mon, 01, Sep 2025
- 09:26 EDT
- 50
FILE PHOTO: A man speaks on his mobile phone next to an installation of the Rupee logo and Indian currency coins outside the Reserve Bank of India (RBI) headquarters in Mumbai, India, August 1, 2025. / REUTERS/Hemanshi Kamani/File photo
The Indian rupee dipped on Sept. 1, hovering near an all-time low, with analysts expecting its underperformance versus other Asian currencies to persist amid high U.S. tariffs.
The rupee was quoting at 88.27 to the U.S. dollar, just shy of its lifetime low of 88.3075 hit on Aug. 29. The unit is the worst performing Asian currency year-to-date, down about 3 percent against the dollar.
Also Read: U.S. Tariffs on India – A Blow to the Economy and a Warning for the Future
In comparison, the Thai baht, Singapore dollar, and Korean won have rallied more than 6 percent and the offshore Chinese yuan has risen 3 percent.
The rupee's underperformance is expected to continue as India faces the highest U.S. tariffs on its exports among Asian countries.
With "the latest U.S. tariff developments, their macroeconomic impact, and the flow picture, we think the rupee should remain under pressure and underperform other carry candidates" and its Asian peers in the near-term, Goldman Sachs said in a note.
Economists at Goldman Sachs estimate that the total effective U.S. tariff rate is now around 32 percent on India goods.
The tariffs could widen the trade deficit by constraining shipments in key sectors such as textiles and gems and jewellery. Slower export growth could dampen GDP growth, which in turn would hurt portfolio flows and amplify pressure on the rupee.
Foreign investors have pulled out $2.4 billion from Indian equities over the past three sessions, including nearly $950 million on Aug. 29, when the rupee hit a record low of 88.3075.
Continued outflows are expected to exacerbate volatility in the currency and equity markets.
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