The Indian Rupee on Thursday fell to a five-month low against the United States dollar amid concerns related to the 25% tariff on India announced by Washington.

The Rupee opened the trading day at 87.69 against the US dollar, slipping from a close of 87.42 on Wednesday, NDTV Profit reported.

The impact of Trump’s announcement was also reflected in the stock market.

Benchmark index Sensex fell more than 500 points or 0.6% during initial trade on Thursday. The Nifty had also fallen by 0.6% below the 24,700-mark as of 9.50 am.

Investors cumulatively lost Rs 5 lakh crore in the first 15 minutes of trade, according to The Economic Times.

However, by about 12 pm, the Sensex and the Nifty had negated the losses. As of 1.30 pm, both indices had risen by more than 0.3% as compared to Wednesday.

The rupee was trading at 87.63 against the US dollar at 1.30 pm.

Besides the 25% tariff on goods imported from India from August 1, US President Donald Trump on Wednesday said that India will also have to pay a “penalty” for buying a large portion of its military equipment and fuel from Russia amid the war on Ukraine.

However, he did not specify the quantum of the “penalty”.

The United States has said on several occasions it will impose so-called reciprocal tariffs on dozens of countries that have not negotiated separate trade agreements with it by August 1.

Trump announced higher levies in April, before pausing those tariffs at a reduced 10% rate to allow time for negotiations. Despite an extended deadline, Trump has only secured a handful of deals.

On Monday, the US president had said that he would likely introduce a global baseline tariff between 15% and 20% for countries that had not negotiated trade deals with his administration.

Trump had said on June 27 that New Delhi could sign a “very big” trade deal with Washington soon. On July 2, the White House said that the deal was close to being finalised and would be announced soon.

An Indian team led by Union Commerce Minister Piyush Goyal had visited the US in May to negotiate the agreement. Following this, a team of negotiators from the US was in India for a week in June.

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