The Indian rupee slipped sharply on Friday, falling below the 88-mark against the US dollar for the first time. It hit a record low of ₹88.31 per dollar during the day before recovering slightly to close at ₹88.20. This means the rupee lost 57 paise compared to Thursday’s close of ₹87.63 — its biggest single-day fall in the last three months.
Currency dealers said the fall could have been even worse if the Reserve Bank of India (RBI) had not intervened by selling dollars to control the slide.
According to forex consultant KN Dey, the earlier lowest level of ₹87.94 was broken despite RBI’s efforts. Once this level was crossed, stop-loss orders were triggered, and many traders rushed to buy dollars, which pushed the rupee further down. RBI then stepped in heavily to reduce panic, but the rupee still ended at a new low.
The rupee has now fallen for four months in a row, ending August with a 0.68% loss. The main reason is the recent US tariff hike, which has doubled import duties on Indian goods to 50%. Experts fear this could worsen India’s trade deficit, reduce foreign inflows, and create more pressure on the currency.
There are also growing concerns that India’s economic growth may drop below 6% if the US continues with such high tariffs. The RBI had already cut its growth forecast after the first round of tariffs, and another downgrade could follow.
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On Friday, importers rushed to buy dollars due to panic, while many exporters cancelled their forward contracts because of restrictions on Indian exports to the US. Foreign investors also sold more Indian stocks, worsening the pressure. Experts say exporters may need three to four months to find new markets outside the US.
“We are still in the middle of this crisis, and the rupee will remain under pressure,” Dey said. Data shows that exports to the US make up 2.2% of India’s GDP, raising concerns about possible job losses in labour-intensive sectors if the slowdown continues.
