Indian Rupee Slips on Tariff Uncertainty

The Indian rupee rose to around 90.9 per dollar, pausing losses from the previous session as sentiment was supported by expectations of strong foreign inflows from upcoming state-run IPOs. India aims to raise $19.7 billion by 2030 through IPOs of subsidiaries in railways, power, oil and gas, aviation, and coal, with early offerings like GAIL Gas and Coal India expected to attract domestic and foreign investors. Further boosting optimism, Canadian PM Mark Carney will visit India this week to meet Prime Minister Modi on March 2 to discuss new trade, energy, AI, and defence partnerships. At the same time, the Reserve Bank of India’s foreign-exchange strategy is providing added support. Analysts expect the central bank to buy dollars if the rupee reaches 88–89 per dollar. Despite a $62 billion short forward book and heavy sovereign borrowing of around 30 trillion rupees next fiscal year, RBI reserves remain at a record $725.7 billion, cushioning against volatility.

The Indian rupee fell to around 90.7 per dollar, extending last week’s losses as markets weighed renewed US trade policy uncertainty. Investors are monitoring the fallout from the Supreme Court’s decision striking down Trump’s emergency tariffs, alongside his subsequent temporary 15% levy on imports. Focus remains on India’s postponement of its Washington trade delegation, a move that may prompt a reassessment of its U.S. trade strategy, while traders track oil prices and shifting supply-demand dynamics. On the upside, analysts note that India’s effective tariff rate in the US is now projected at 11–13%, lower than previously feared and favorable relative to regional peers. Markets continue to balance short-term relief from reduced tariff exposure against persistent policy uncertainty and broader global risk factors.

The Indian rupee weakened toward 91 per dollar, hitting its weakest level in over two weeks, weighed by broad dollar strength. The rupee slipped alongside other emerging-market peers as the dollar rose on strong US economic data. At the same time, thin liquidity in Asian markets amid the holiday period made regional currencies more sensitive to modest order flows. Persistent importer and hedging demand for dollars, coupled with elevated import costs in oil and commodities, also kept USD/INR under pressure. Meanwhile, early pre-market dollar sales by the Reserve Bank of India helped the rupee stabilize just below the 91 mark, providing temporary support alongside past interventions, improved foreign portfolio inflows, and optimism from recent trade deals. Market participants continue to monitor import flows, global commodity prices, and domestic policy signals for further cues on rupee movements.