The Indian rupee fell on Friday to a level that bankers described as a key support, weighed down by the risk-off mood and weakness in Asian peers amid renewed concerns about US tariffs.
The rupee was trading at 87.3850 to the US dollar at 10:58 a.m. IST, down from 87.20 the previous session.
The Reserve Bank of India intervened on Thursday, when the currency fell to 87.40.
"People will be looking to see if the RBI is marking 87.40-87.50 for the time being. I believe there must be strong actual (dollar) demand if we are to move above 87.50," said a currency trader at a bank.
The rupee and other Asian currencies were hit by an equities sell-off due to concerns about a trade war. US President Donald Trump announced that tariffs on Canada and Mexico will go into effect next week, and that he will levy additional tariffs on China. Canada promised swift retaliation.
U.S. stocks fell on Thursday, while the dollar index rose.
"Markets continue to live with the uncertainty and whiplash of the multitude of tariff proposals in the pipeline," according to a note from MUFG Bank.
Meanwhile, dollar-rupee forward premiums remained range-bound, awaiting the outcome of the RBI's $10 billion swap. Bankers anticipate a high level of participation in the auction.
