By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee declined on Friday to a level that bankers said was a key support, pressed by the risk-off mood and the weakness in Asian peers on renewed worries over U.S. tariffs.
The rupee was quoted at 87.3850 to the U.S. dollar at 10:58 a.m. IST, down from 87.20 in the previous session.
The Reserve Bank of India had intervened on Thursday when the currency dropped to 87.40.
“You will have people looking at whether the RBI is marking the 87.40-87.50 level for the time being. I think there needs to be heavy actual (dollar) demand if we are to move past 87.50,” a currency trader at a bank said.
The rupee and other Asian currencies had to contend with the sell-off in equities over concerns of a trade war. U.S. President Donald Trump said the tariffs on Canada and Mexico will come into effect next week and he will levy more tariffs on China. Canada vowed swift retaliation.
U.S. equities slumped on Thursday and the dollar index rallied.
“Markets continue to live with the uncertainty and whiplash of the multitude of tariff proposals in the pipeline,” MUFG Bank said in a note.
Meanwhile, the dollar-rupee forward premiums were range-bound, awaiting the results of the RBI’s $10 billion swap. Bankers expect the auction to be well-subscribed.
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
