The Indian rupee fell by 29 paise and opened at ₹87.95 against the U.S. dollar on Monday morning, August 5, 2025. This drop comes after increasing global concerns and economic uncertainty caused by recent geopolitical developments.
One major reason behind the rupee’s weakness is a recent warning by former U.S. President Donald Trump, who said that the United States may increase tariffs on countries buying oil from Russia. This has created fear in the global markets, especially among developing countries like India which import a large amount of oil.
The forex market reacted strongly to Trump’s statement. Traders are worried that such a move could impact India’s trade balance and foreign exchange reserves, putting more pressure on the rupee. A higher import bill would mean more dollars leaving the country, causing the rupee to weaken further.
Experts say that rising global oil prices and political tensions are likely to keep the rupee under pressure in the coming weeks. India, being a major oil importer, is particularly vulnerable to such shocks. If oil prices rise and the dollar strengthens, it becomes costlier for India to buy oil, which affects the value of the rupee.
Meanwhile, the U.S. dollar index remains strong due to safe-haven demand, further weighing down the rupee. Investors are choosing the dollar as a safer option amidst global uncertainty, which is pulling money out of emerging markets like India.
To control the situation, the Reserve Bank of India (RBI) may intervene in the forex market to stabilize the rupee. However, the situation remains tense, and further developments will depend on global oil trends and U.S. trade policies.
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