Rupee falls 5 paise to 85.74 against dollar

Mumbai: The rupee weakened by 5 paise to close at 85.74 against the US dollar on Thursday, as month-end dollar demand from importers, coupled with the greenback’s recovery against major currencies, weighed on the rupee.

The US dollar strengthened after US president Donald Trump announced long-promised 25 per cent tariffs on automotive imports, set to take effect on April 2.

Forex dealers said the rupee is also facing renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the US currency from importers.

However, positive domestic markets and foreign fund inflows cushioned the downside.

At the interbank foreign exchange, the rupee opened at 85.90 and touched the high of 85.73 against the greenback during the day.

The unit later turned volatile and hit the day’s low of 85.93 before ending the session at 85.74 against the dollar, 5 paise lower from its previous closing level.

On Wednesday, the rupee settled higher by 3 paise at 85.69 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.11 per cent

at 104.43.