US President Donald Trump had a great pride that as soon as he would impose tariffs, there will be an outcry in India. But Trump Gurur would be shattered like this, no one knew. On Wednesday, when Trump imposed a tariff and fine of 25 per cent of Bharat Ni, India’s rupee definitely broke up to 89 paise and recovered later. On Thursday, this tariff bomb proved to be like a bomb in the currency market. After such a big action from the US, on Thursday, the rupee saw a rise of 22 paise against the dollar, which can be considered a big thing.
Something similar was seen in the stock market, when the market fell to 800 points in a few minutes of opening. But later the stock market shocked everyone by overturning. The rupee also appeared playing something like this with dollars throughout the day. By the way, traders of the currency market are still a cautious stance. Let us also tell you how the rupee in the currency market defeated Trump’s decision.
Rupee rises
After US President Donald Trump’s announcement of imposing a fine on Indian imports on 25 % tariff and Russian crude oil, the rupee rose 22 paise from its life time lower level to 87.58 (provisional) per dollar on Thursday amid low prices of crude oil and suspected intervention of RBI. Foreign currency traders said that after a decline of 89 paise in the biggest one -day decline in more than three years on Wednesday, the rupee remained somewhat, but a comprehensive approach remains alert.
The Interbank Foreign Currency Exchange Market opened at 87.66 against the rupee, and touched the lower level level of 87.74 and high levels of 87.51 against the US currency. At the end of Thursday’s trading session, the rupee closed at 87.58 (provisional) with a gain of 22 paise from its previous closed price. Foreign currency traders said that after the US imposes 25 percent tariff on Indian exports, the feeling of risk has arisen and concerns have increased about more devaluation of the rupee.
No clarity about tariff
Amit Prabari, MD of CR Forex Advisors, said that until clarity comes on the tariff’s front, pressure can remain on the rupee. He further said that a meaningful upward can only happen when it breaks below 87.20, which is currently a major support level. On Wednesday, the rupee closed at a 5 -month low of 87.80 against the US dollar, when the US announced a comprehensive tariff of 25 percent on Indian imports in the absence of trade agreement before the August 1 deadline. It is not clear whether a 25 percent fee will be levied in addition to the current 10 percent baseline tariffs. 10 percent of tariffs, which are currently applicable to most Indian goods except something, were announced by Trump on 2 April. Apart from this, the correct amount of fine is also not clear.
Rupee can reach the level of 88
Meanwhile, negotiations on the proposed bilateral trade agreement continue as an US team is visiting New Delhi on 25 August for the sixth round of talks. Top officials of the two countries recently completed the fifth round of talks in Washington. Anand Rathi Global Finance Executive Vice President and Treasury Head Harsimran Sahni said that although the RBI may also interfere in the spot market to control volatility, the comprehensive approach remains vigilant. If the pressure on the rupee continues, then it can also touch the resistance level of 88 if business tension and increase.
Stock market declines and dollar rise
In the domestic stock market, the 30 -share BSE Sensex closed down 296.28 points or 0.36 percent to close at 81,185.58, while the Nifty fell 86.70 points or 0.35 percent to close at 24,768.35. The dollar index, which reflects the dollar strength against six currencies, rose 0.03 percent to 99.84. Brent oil prices fell 0.67 percent to $ 72.75 per barrel. Meanwhile, the US Federal Reserve kept the interest rates stable and indicated that it would be too early to consider cuts cuts, which strengthened the dollar in July. According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 850.04 crore on a pure basis on Wednesday.