The Indian Rupee (INR) slides to a fresh almost two-week low against the US Dollar (USD) at the open on Monday. The USD/INR pair jumps to near 90.50 as the Indian currency weakens, following threats from United States (US) President Donald Trump that he could further raise tariffs on imports from India for not supporting Washington in resolving the Russian oil issue.
“We could raise tariffs on India if they don’t have help on Russian oil issue,” US President Trump said, Reuters reported. Trump added, “They wanted to make me happy, basically PM Modi’s a very good man. He’s a good guy. He knew I was not happy. It was important to make me happy. They do trade, and we can raise tariffs on them very quickly.”
The tariff threat from US President Trump on India has renewed trade frictions between the two nations. In 2025, Trump raised import duties on India to 50%, which included punitive 25% tariffs for buying Oil from Russia.
Trade tensions between the US and India led to a significant increase in the demand for the US Dollar by Indian importers and an outflow of foreign funds from the Indian stock market. Strong demand for the US Dollar pushed the USD/INR pair to its lifetime high at 91.55 and forced the Reserve Bank of India (RBI) to intervene in spot and Non-Deliverable Forward (NDF) markets to support the Indian Rupee.
In 2025, Foreign Institutional Investors (FIIs) pared their stake worth Rs. 3,06,418.88 crore in the Indian equity market. FIIs have also turned out to be overall net sellers in the first two trading days of January 2026 and have offloaded their stake worth Rs. 2,978.80 crore.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.16% | 0.09% | 0.24% | 0.20% | 0.24% | 0.18% | |
| EUR | -0.23% | -0.07% | -0.11% | 0.01% | -0.03% | 0.01% | -0.05% | |
| GBP | -0.16% | 0.07% | -0.06% | 0.08% | 0.03% | 0.08% | 0.02% | |
| JPY | -0.09% | 0.11% | 0.06% | 0.15% | 0.11% | 0.14% | 0.09% | |
| CAD | -0.24% | -0.01% | -0.08% | -0.15% | -0.04% | 0.00% | -0.06% | |
| AUD | -0.20% | 0.03% | -0.03% | -0.11% | 0.04% | 0.05% | -0.02% | |
| INR | -0.24% | -0.01% | -0.08% | -0.14% | 0.00% | -0.05% | -0.06% | |
| CHF | -0.18% | 0.05% | -0.02% | -0.09% | 0.06% | 0.02% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
US Dollar gains amid risk-off mood at the start of US data-packed week
- A positive weekly start by the USD/INR pair is also driven by strength in the US Dollar due to risk-off market sentiment. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.35% higher to near 98.80.
- Investors turn risk-averse following the US’ strike on Venezuela and the capture of President Nicolas Maduro against drug-trafficking charges in New York, and threats from US President Trump to take action on Colombia and Iran too.
- Escalating geopolitical risks have forced investors to shift to the safe-haven fleet, improving demand for bullion, base metals, and the US Dollar.
- US President Trump has also stated that Washington will take over and restructure Venezuela’s Oil industry, which accounts for 7% of global reserves or 303 billion barrels, according to the London-based Energy Institute.
- The impact of the US-led takeover of Venezuela’s Oil industry is expected to be significant for the Indian economy, assuming that the additional supply of Oil will lower energy prices. Given that India is one of the largest Oil-importing countries in the world and meets 85% of its energy needs from imported Oil, lower crude prices will be favorable for the Indian Rupee.
- Going forward, the US Dollar is expected to trade with volatility in a US data-packed week, starting from the ISM Manufacturing Purchasing Managers’ Index (PMI) data for December, which will be published at 15:00 GMT. The ISM Manufacturing PMI is expected to come in mildly higher at 48.3 from 48.2 in November, suggesting that activity has contracted again, but at a slightly moderate pace.
- This week, the notable release will be the Nonfarm Payrolls (NFP) data for December, which is scheduled to be released on Friday. The US NFP data will have a significant influence on market expectations for the Federal Reserve’s (Fed) monetary policy announcement later this month.
- According to the CME FedWatch tool, the Fed is expected to hold interest rates steady in the current range of 3.50%-3.75% in the policy announcement on January 28.
Technical Analysis: USD/INR rises to near 90.50
In the daily chart, USD/INR trades at 90.4470. The 20-day Exponential Moving Average (EMA) slopes higher at 90.2130, maintaining a modest bullish bias. Price holds above the gauge, indicating dip demand persists.
The 14-day Relative Strength Index (RSI) at 56.86 is rising, confirming firming momentum.
Initial support sits at the rising 20-EMA; a daily close beneath it would temper the upside and lead to a deeper retracement towards the December low of 89.50. While the all-time high of 91.55 will remain a key barrier on the upside.
(The technical analysis of this story was written with the help of an AI tool.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.