Indian rupee hits record low on Trump tariff threat

Published 05/08/2025, 05:36
© Reuters.

Investing.com-- The Indian rupee hit its weakest level ever against the dollar on Tuesday after U.S. President Donald Trump threatened to impose more tariffs against New Delhi over its purchase of Russian oil. 

The rupee’s USDINR pair, which gauges the number of rupees required to purchase one dollar, rose as much as 0.5% to a record high of 88.102 rupees to the dollar, although it did trim some of its gains to trade back below the 88 rupee level, Investing.com data showed. 

Trump on Monday repeated his threat of imposing steep trade tariffs on India over its purchases of Russian oil, stating that he will be “substantially raising the Tariff paid by India to the USA.” 

Trump’s comments came after he slapped India with 25% reciprocal tariffs last week, and warned that he could impose tariffs of as high as 100% on the biggest buyers of Russian oil– China and India. 

Reuters reported that India plans to keep purchasing Russian oil despite Trump’s threats. The country has faced mounting pressure to distance itself from Moscow since Russia invaded Ukraine in 2022. 

New Delhi, however, has maintained relations with Russia, citing longstanding ties and economic requirements, chiefly oil.

Trump has also criticized India for its membership in the BRICS group of countries, which he claims have long attempted to undermine U.S. interests.

Rupee weakens ahead of RBI meeting

Weakness in the rupee also comes before the conclusion of a Reserve Bank of India meeting on Wednesday.

The central bank is expected to cut interest rates again in the face of increased economic headwinds, and as it moves to shore up domestic liquidity. 

The RBI has cut rates by a cumulative 1% so far in 2025. 

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