Indian Rupee Nears Record Low Amid US Tariffs 2025

The Indian Rupee is teetering on the edge of its historical low as it faces a combination of global headwinds and domestic pressures. Investor confidence has taken a hit, and with trade relations between India and the U.S. under fresh strain, the Rupee is on track for its steepest monthly drop in almost three years, making it Asia's worst-performing currency so far in 2025.

Trump’s New Tariffs Trigger Sell-Off

The latest blow to the Rupee came after former U.S. President Donald Trump declared plans to enforce a minimum 25% tariff on Indian goods. This aggressive trade stance rattled markets, fueling risk aversion and accelerating the Rupee’s decline. In response, Indian equities also took a hit, with the NSE Nifty 50 index slipping 0.9%, signaling rising concerns about India’s trade outlook and broader economic trajectory.

Rupee Posts Sharpest Monthly Fall Since 2022

USD/INR Exchange Rate – July 2025 Performance In July alone, the Rupee has declined more than 2% against the U.S. Dollar, its steepest monthly drop since 2022. If this momentum continues, it could close the month with its worst performance in nearly three years.

According to a recent report by Goldman Sachs economist Santanu Sengupta, the proposed U.S. tariffs could reduce India’s GDP growth by up to 0.3 percentage points. Coupled with rising external vulnerabilities, this adds further pressure on the Rupee and clouds the near-term economic outlook.

Outlook: Will the RBI Step In?

Market analysts are warning of more weakness ahead. Dhiraj Nim, foreign exchange strategist at ANZ Bank, noted that sustained bearish sentiment could push the Rupee beyond the critical 88-per-dollar level marking fresh all-time lows.

However, many believe that the Reserve Bank of India (RBI) is unlikely to stand idle. The central bank has historically intervened to curb excessive currency swings, particularly when financial stability is at risk. Any continued decline could prompt the RBI to step in more aggressively to stabilize the exchange rate.

Fragile Times for the Rupee

The recent plunge in the Indian Rupee isn’t just about technicals, it highlights deeper issues involving trade policy, capital flow dynamics, and economic resilience. While RBI intervention might provide temporary relief, the broader trend will be dictated by geopolitical events and shifts in investor sentiment. With the currency nearing all-time lows, Indian policymakers and market players are navigating a tightrope during yet another bout of global uncertainty.

As the Indian Rupee edges toward historic lows, forex traders are turning to platforms that offer both stability and strategic tools. Ultima Markets, a globally trusted forex broker, is emerging as a preferred choice for those navigating turbulent currency markets like USD/INR.