USD/INR: Rupee Falls to 86.55 Against US Dollar Amid Tariff Threats

The Indian rupee depreciated by 33 paise to 86.55 against the US dollar in early trade on Tuesday, January 28, 2025, weighed down by the strength of the dollar in the overseas market and a muted trend in domestic equities.

At the interbank foreign exchange market, the rupee opened at 86.45 and later slipped to 86.56 against the dollar, marking a decline of 33 paise from its previous close.

Dollar Index Surges Amid Tariff Threats

The dollar index, which measures the US dollar’s strength against a basket of six major currencies, rose 0.49% to 107.88. The uptick followed US President Donald Trump’s threat to impose a 25% tariff on Colombia after the country returned a plane carrying detained migrants to the US.

US Pauses Sanctions After Agreement with Colombia

The US government announced a pause on sanctions and tariffs against Colombia after the country agreed to meet all the terms set by President Donald Trump.

The agreement includes accepting flights carrying deported migrants from the US. This decision came after Colombian President Gustavo Petro initially refused entry to two US military aircraft carrying detained Colombian migrants.

The White House confirmed the deal, adding that the retaliatory tariffs threatened by both Trump and Petro have been averted for now.

Oil Prices Steady After 2% Decline

Oil prices steadied after a 2% drop on Monday, as President Trump threatened to impose a wide-ranging set of tariffs on imports, including key industrial commodities.

West Texas Intermediate (WTI) traded above $73 per barrel, while Brent crude closed above $77 per barrel. Trump intended to introduce tariffs on foreign-produced goods shortly, targeting products such as steel, aluminium, and copper to incentivise domestic manufacturing.

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