The Indian rupee further weakened by 14 paise to close at an all-time low of 87.57 (provisional) against the US dollar on Thursday, a day ahead of the Reserve Bank of India’s monetary policy announcement.

The RBI-led monetary policy committee (MPC) is expected to cut interest cut after an almost five-year gap. This is set to downward pressure on the Indian currency, which is already facing a negative bias over the global trade war due to US President Donald Trump’s tariff policy.

At the interbank foreign exchange, the rupee opened at 87.54 and slipped further to an all-time intraday low of 87.60 against the greenback in initial deals.

The domestic unit finally settled for the day at 87.57 against the greenback, registering a plunge of 14 paise from its previous close.

On Wednesday, the rupee plunged 36 paise to close at an all-time low of 87.43 against the US dollar.

The local unit has lost over 2% so far this year. The sharp drop in the domestic unit comes after nearly a 3% fall in the USD/INR pair in 2024, making it one of the worst-performing Asian currencies, PTI reported.

On 1 January 2024, the rupee was at 83.21 against the greenback.

The rupee has lost 193 paise so far this year. The domestic unit was quoted at 85.64 against the greenback on 1 January 2025.

"We expect the rupee to trade with negative bias amid weak domestic markets and importer demand for dollars. Risk aversion in global markets amid ongoing uncertainty over US trade tariffs may further pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels," PTI quoted Mirae Asset Sharekhan research analyst Mirae Anuj Choudhary as saying.

Choudhary further noted that investors may remain cautious ahead of the RBI's monetary policy meeting decision and US non-farm payrolls data on Friday. "USD-INR spot price is expected to trade in a range of 87.30 to 87.90," Choudhary added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.40% higher at 108.00.

Brent crude, the global oil benchmark, rose 0.52% to USD 75.00 per barrel in futures trade.