Will Indian rupee drop to 24 against dirham after latest US tariff threats?

Rupee falls to 23.85 and under more pressure as US-India trade dispute escalates

Last updated: August 05, 2025 | 08:20

Manoj Nair, Business Editor

2 MIN READ

The India rupee started the new week on a firmer not, but the latest US tariff threat salvoes is again adding to the pressure. It's back to touching distance with hitting a new all-time low of 24 to dirham.

Bloomberg

Dubai: Just a day after inching higher, the Indian rupee finds itself back under pressure - and for the same reasons. If the pressure persists, the rupee is potentially looking at dropping closer to a new low of 24 to the dirham.

The current lowest ever 23.94 was back in February.

Early today (August 5), the Indian rupee opened at 23.9 (87.85 to a dollar) versus yesterday's closing rate of 87.65 (23.86). Yesterday's opening had pushed the rupee to 23.75 levels.

Also Read: Indian rupee gains against dirham - have UAE NRIs already gained on fund transfers?

As for Indian expats in the UAE and Saudi Arabia, the August transfer of funds back home may have already taken place, many of them getting exchange rates of 23.7-23.8 to a dirham when remitting between Friday and Sunday last.

But many UAE based businesses with India connections had delayed fund transfers/new deals in the belief that the rupee will drop more through August under the US tariff shadow. Based on latest rupee-dirham movements, these businesses could be proved right.

"India has so far indicated that it will continue to buy oil from Russia and not pay in dollars," said an FX analyst. "That will obviously make it difficult for a trade deal to be struck with the US and for tariff levels to be brought down from 25%."

If a no-deal situation persists, then the chances of the rupee falling all the way to 24 cannot be discounted.

"The Indian rupee may drop past 23.95 (88 for a dollar) to the US dollar to a new all-time low today (August 5) after President Donald Trump threatened even steeper tariffs on Indian goods," said Neelesh Gopalan, Treasury Manager at a Dubai remittance platform. "This will worsen an already fragile sentiment and stoke concerns of more foreign fund outflows from India this month."

Manoj NairBusiness Editor

Manoj Nair, the Gulf News Business Editor, is an expert on property and gold in the UAE and wider region, and these days he is also keeping an eye on stocks as well. Manoj cares a lot for luxury brands and what make them tick, as well as keep close watch on whatever changes the retail industry goes through, whether on the grand scale or incremental. He’s been with Gulf News for 30 years, having started as a Business Reporter. When not into financial journalism, Manoj prefers to see as much of 1950s-1980s Bollywood movies. He reckons the combo is as exciting as it gets, though many will vehemently disagree.