Indian Rupee Crashes Past ₹88 to Record Low as U.S. Tariffs Bite
The Indian rupee plummeted to an all-time low of ₹88.29 per U.S. dollar, before a slight rebound following intervention by the Reserve Bank of India (RBI). The downturn reflects growing concerns over recently imposed U.S. tariffs and weak investor sentiment.
On August 29, 2025, the Indian rupee dropped precipitously, breaching the ₹88-per-dollar barrier for the first time, touching ₹88.29 during the day—a historic low. The Reserve Bank of India stepped in with market interventions, which helped the currency partially recover to ₹88.12 .
The sharp decline stems from the U.S. administration doubling tariffs on Indian goods—from 25% to a staggering 50%—prompting fears of reduced growth and export slowdowns in sectors like textiles and jewelry. Economists warn this move could trim India’s GDP growth by 60–80 basis points if sustained .
Compounding the pressure were massive foreign portfolio outflows, totaling $9.7 billion, straining India’s balance of payments. With these headwinds, analysts caution that further weakening toward ₹89 remains a distinct possibility .
In parallel, the rupee also devalued against the offshore Chinese yuan, hitting a record low of 12.3862 per yuan. While this decline may dampen India’s purchasing power for imports, it could enhance the competitiveness of Indian exports—especially in U.S.-bound sectors—relative to Chinese goods .
