NEW DELHI (dpa-AFX) - The Indian rupee weakened against the U.S. dollar in the European session on Monday, as investors await the announcement of the interest rate decision by the Reserve Bank of India (RBI) on Wednesday.
The continuous outflow of foreign currency from Indian capital markets, the trade tensions between the U.S. and India, and the uncertainty regarding the RBI monetary policy announcement scheduled for Wednesday, also led to the downturn of INR.
Last week, the US President Donald Trump declared a 25% tariff along with an unspecified penalty on oil imports from Russia, specifically targeting imports from India.
This announcement has heightened uncertainty regarding the future prospects of Indian companies that export a considerable portion of their production to the United States.
Furthermore, it has also reduced the competitiveness of Indian goods in the international market.
Against the U.S. dollar, the rupee fell to a 4-day low of 87.70 from an early 5-day high of 87.12.
If the rupee extends its downtrend, it is likely to find support around the 89.00 region.
Looking ahead, U.S. factory orders for June is due to be released in the New York session.
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