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The rupee appreciated to cross Rs 85-mark against the US dollar for the first time since December 2024.
Indian Rupee Appreciates To Cross Rs 85-Mark Amid Weak Dollar.
Indian rupee has appreciated Rs 85-mark for the first time since December 2024 against dollar. This appreciation was largely due to the broad-based weakness of the greenback, which followed the impact of tariffs imposed by former President Donald Trump, offering relief to emerging market currencies like the rupee.
In early trade on Friday, the rupee appreciated appreciated 34 paise to 84.96 against the US dollar.
The main factors contributing to the rupee’s recovery were the decline in crude oil prices and the weakened state of the American currency in the global market.
US President Donald Trump on April 02 announced new tariffs up to 99% on several nations globally including India as part of “Liberation Day”, aimed at rebalancing the trade imbalances. However, experts fear the move would escalate to a full blown-out trade war once other nations like China put retaliatory tariffs.
Fear Of Inflation And Recession
Forex traders noted that the American dollar weakened amid concerns over inflationary pressures resulting from the tariffs and the potential for a recession in the United States.
Additionally, retaliatory tariffs from trade partners could provoke a global trade slowdown, heightening fears of a recession.
At the interbank foreign exchange market, the rupee opened at 85.07 against the US dollar, then gained momentum, reaching 84.96, marking a 34 paise increase from its previous close.
On Thursday, the rupee had settled at Rs 85.30, up by 22 paise against the US dollar, as the greenback weakened against its major counterparts after President Trump imposed reciprocal tariffs on approximately 60 countries.
The currency’s rebound is being driven by a steep fall in Brent crude prices, which are down 0.84% to $69.55 per barrel, a weaker dollar index, which is down 0.42% to 101.64, and expectations of four Fed rate cuts this year, starting in June.
(With PTI Inputs)
