USD/INR: India Rupee Hits Record Low on Sep 1 Amid US Tariff Pressure; RBI in Spotlight

The Indian rupee slipped to a new lifetime low of 88.33 per US dollar on Monday, breaking past its previous record of 88.3075. The decline comes on the back of escalating US tariffs on Indian goods, which have raised concerns over the country’s export competitiveness and broader economic outlook.

Market participants were caught off guard despite the Reserve Bank of India (RBI) stepping in on Friday to support the currency.

Impact of Higher US Tariffs

The US recently raised tariffs on Indian products by 25%, taking the total duty burden to nearly 50%. This move is expected to impact India’s key export sectors such as textiles and engineering goods, threatening corporate revenues, margins, and even future hiring and investments.

The uncertainty has already rattled foreign investors, who have withdrawn around $2.4 billion from Indian equities in the past three sessions. A slowdown in exports could further widen the trade deficit and strain the current account, leaving India more dependent on capital inflows, which remain fragile under the current global backdrop.

RBI Under the Lens

The RBI has a long standing reputation for intervening to smooth out excessive volatility in the rupee, as per the Reuters report. While the central bank has reiterated that it does not target a fixed exchange rate, its actions remain crucial in determining short term market dynamics, particularly in times of uncertainty or speculative pressure.

Read More: Trump Tariffs Hit Indian Seafood Stocks: Avanti Feeds, Apex Frozen, Waterbase Slide.

Conclusion

With the rupee under sustained pressure and external headwinds mounting, the RBI’s role will be pivotal in stabilising sentiment. Markets will be closely watching the central bank’s next steps as India navigates the dual challenges of trade tensions and capital outflows.

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