Indian Rupee: Likely to stay under pressure as dollar stays elevated

The Indian rupee is likely to stay pressured on Tuesday morning tracking consistent upside in dollar overseas. On Monday, rupee had plunged 45 paise and moved closer to the 88 per US dollar-level during initial trades, weighed down by the strength of the American currency tariff concerns, but settled on a flat note at around 87.50 on suspected RBI intervention. The new RBI governor Sanjay Malhotra, in his first monetary policy stated that the central bank has been employing all tools at disposal to face the multi-pronged challenges. Our interventions in the forex market focus on smoothening excessive and disruptive volatility rather than targeting any specific exchange rate level or band, he added. Meanwhile, Indian shares fell notably on Monday and the benchmark S&P/BSE Sensex ended the session down 548.39 points, or 0.70 percent, at 77,311.80, after having fallen to a low of 77,106 earlier. The broader NSE Nifty index hit an intraday low of 23,316.30 before closing down 178.35 points, or 0.76 percent, at 23,381.60. The American currency gained in the overseas market after US President Donald Trump's plans to impose 25 per cent tariffs on steel and aluminum imports, along with reciprocal tariffs targeting countries taxing US exports. The move has added jitters over the global trade war with China's reciprocal duties coming into effect.

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