Informist mumbai

The rupee ended at a record closing low against the dollar Tuesday after US President Donald Trump threatened to substantially raise tariffs on India for its continued procurement of crude oil from Russia. However, dollar sales by the Reserve Bank of India prevented the Indian currency from falling to a record low, dealers said.

"After Trump's news, today was expected to be volatile, but that was not really the case. Rupee was in a range for the whole day, only because of RBI," a dealer at a private-sector bank said. "They (RBI) ensured the moves in rupee contained." 

The Indian currency was also weighed down by banks' dollar purchases for foreign portfolio investors and importers, dealers said. After moving in a range of 14 paise, the rupee ended at 87.8000 a dollar Tuesday, down 0.2% from Monday. The rupee started the day sharply lower against the dollar at 87.8500. 

"We can't call it panic, not yet. Importers are cautious and are stocking up on dollars on every down tick as they are expecting major rise in the dollar going forward," a dealer at a state-owned bank said. Importers' dollar buys further put pressure on the rupee and took it to the day's low of 87.8875 against the dollar. 

The Indian unit would have breached the all-time record low level of 87.9500 a dollar on Tuesday, had it not been for the Reserve Bank of India's likely dollar sales in the offshore market as well as the spot market, dealers said.