By Ashwin Manikandan
MUMBAI, August 07 (Reuters) – The Indian rupee shrugged off U.S. President Donald Trump’s additional tariffs on Indian goods on Thursday, as traders and analysts bet on central bank support to steady the currency.
The rupee closed largely flat at 87.7025 against the U.S. dollar, up 0.03% from 87.7325 on Wednesday.
U.S. President Donald Trump followed through on his threat and imposed an additional 25% tariff on Indian goods over continued purchases of Russian oil.
“…Considering the recent moves, it appears that the central bank is committed to preventing the rupee from depreciating further,” said Abhishek Goenka, founder and chief executive of IFA Global.
Meanwhile, the Indian central bank resumed its intervention in the non-deliverable forwards (NDF) market last week, marking a return to a tool it had mostly avoided so far under governor Sanjay Malhotra.
The RBI stepped in on Tuesday to prevent the rupee from breaching its record low of 87.95, traders said.
Forex reserves dropped over $9 billion last week, likely due to spot and NDF market intervention.
The rupee slid 1.2% in the week to Aug. 1, its steepest fall in nearly three years. Other Asian currencies also shrugged off Trump’s tariff threats.
The South Korean won advanced 0.3%, while the Indonesian rupiah climbed 0.4%.
Dollar index was flat at 98.184 as of 1017 GMT, despite weak U.S. jobs data raising expectations for a rate cut in September in the world’s largest economy.
India’s equity benchmarks, the BSE Sensex and Nifty 50 both closed 0.1% higher despite Trump’s announcements.
(Reporting by Ashwin Manikandan; Editing by Nivedita Bhattacharjee)
