Rupee drops 19 paise to 85.63 against U.S. dollar in early trade

Rupee weakens against dollar amid global trade war concerns, RBI interest rate deliberations, and declining crude prices.

The rupee declined 19 paise to 85.63 against the U.S. dollar in early trade on Monday (April 7, 2025), facing the heat of the global trade war triggered by the U.S. reciprocal tariff and China’s retaliatory move that also crashed equity markets worldwide to their record lows.

According to forex traders, a steep decline in crude prices and a weaker American currency failed to support the domestic currency amid the incessant foreign fun outflows in line with the global sell-offs.

Meanwhile, they said that market participants remained concerned as the Reserve Bank of India’s monetary policy committee began its three-day deliberations on key interest rates. The decision of the six-member rate-setting panel will be announced on Wednesday (April 2, 2025).

At the interbank foreign exchange, the rupee opened at 85.79 and strengthened slightly to trade at 85.63 against the greenback, registering a loss of 19 paise from its previous closing level.

On Friday (April 4, 2025), the rupee settled 14 paise lower at 85.44 against the U.S. dollar, a day after gaining 22 paise on Thursday (April 3, 2025), following the implementation of the U.S.’ reciprocal tariff on about 60 countries.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05% lower at 102.71.

Analysts attributed the weakening dollar to disappointing services, PMI data and concerns over inflation and economic growth due to the global tariff war as China imposed 34% import duties in retaliation to the Donald Trump administration’s sweeping tariff move.