Daijiworld Media Network – New Delhi
New Delhi, Apr 4: In a significant turnaround, the Indian rupee surged past the 85-mark against the US dollar on Friday, buoyed by a sharp drop in both the dollar index and global crude oil prices. The development follows heightened concerns over a potential US recession triggered by newly imposed reciprocal tariffs by President Donald Trump.
Opening the day at 85.04, the rupee gained ground swiftly and was trading at 84.99 during early hours—marking a 40-paise jump from Thursday’s closing figure of 85.44. This marks the first time since December 2024 that the rupee has traded below the 85 threshold.
Analysts attribute this appreciation to two key global triggers: a significant weakening in the dollar index and a sharp decline in Brent crude prices. The dollar index, which measures the US dollar against six major global currencies, dropped steeply from 104 to around 101.70 after the US government’s surprise tariff hike announcement.
Experts suggest that the heavier-than-expected tariffs have intensified fears of an economic slowdown in the US, thereby weakening the dollar. “The reciprocal tariffs have escalated concerns of a recession, leading to the current dip in the dollar index,” said a market observer.
Meanwhile, Brent crude oil prices have fallen sharply and are currently hovering around USD 69.64 per barrel. With India importing over 80% of its crude oil needs, the fall in prices translates to lower foreign exchange outgo, offering support to the rupee.
Jateen Trivedi, VP research analyst at LKP Securities, noted that ‘the rupee has made a strong recovery against the dollar. With favorable global cues and steady foreign institutional inflows, the rupee is likely to trade between 85 and 85.90 in the near term’.
A recent Bank of Baroda report highlighted that the rupee’s performance in FY25 was notably more stable than other global currencies, despite the overall strength of the dollar. It also pointed out that a reversal in dollar momentum and renewed foreign portfolio inflows toward the year-end helped the rupee recover up to 2.4% in just a single month.
With current trends in crude oil and global currency movements, experts are keeping a close watch on whether this rally in the rupee will sustain in the coming sessions.