Indian rupee hits new closing low on Jul 31; worst drop since Sep 2022

01 Aug '25

2 min read

Indian rupee hits new closing low on Jul 31; worst drop since Sep 2022

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Insights

The Indian rupee (INR) closed at a new low of 87.60 against the USD yesterday, depreciating by 0.2 per cent in July, as President Donald Trump threatened to impose 25-per cent tariff on Indian exports to the US.
Tension in the Middle East, volatile crude prices and foreign fund outflows played their role.
The INR has depreciated by 2.4 per cent in FY26, and continues to lag behind its Asian peers.

The Indian rupee (INR) closed at a new low of 87.60 against the US dollar (USD) yesterday, depreciating by 0.2 per cent in July, as President Donald Trump threatened to impose 25-per cent tariff on Indian exports to the United States. The INR depreciation was 1.3 per cent in May.

Tension in the Middle East, volatile crude oil prices and foreign fund outflows played their role as well. Foreign investors pulled out over $1.8 billion from Indian equity and debt markets in June this year.

Trump has also announced an unspecified penalty on India for purchasing arms and oil from Russia.

The last closing low for the INR was 87.58 per USD on February 6 this year. The rupee had touched an all-time low of 87.95 intraday on February 10 this year.

The INR has depreciated by 2.4 per cent in the current fiscal (FY26), and continues to lag behind its Asian peers, according to Indian media reports.

The US Federal Reserve’s (Fed) decision to hold interest rates steady at 4.25-4.5 per cent in a 9-2 vote also triggered market volatility yesterday, pushing the USD and US treasury yields higher.

Hawkish remarks from Fed chair Jerome Powell reduced the chances of a rate cut in September. It is too soon to say whether the US central bank will cut its interest rate target in September, Powell said, citing low unemployment and solid labour market conditions.

Fibre2Fashion News Desk (DS)

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