Rupee Ends At 90.26, Posts Best Single-Day Gain Since 2018. What Experts Suggest Post India-Us Trade Deal?

On Tuesday, 3 February 2026, the Indian National Rupee (INR) rose sharply against the US Dollar to close at 90.27 per dollar. This was the INR’s highest single-day gain since December 2018. From its previous close of 91.51 per dollar, the INR jumped 125 paise, or 1.36%, on Tuesday.

Experts believe that this rally is fuelled by the announcement of the long-awaited US-India trade deal by the US President, Mr Donald Trump. Reportedly, after a phone call with the Indian Prime Minister, Mr Narendra Modi, the US President informed that India has agreed to stop purchasing Russian oil, easing a major source of bilateral tension between the two countries.

One Of The Worst-performing Currencies

The rally in INR’s value against the US Dollar came after the former became one of the worst-performing Asian currencies since the imposition of Washington tariffs in August 2025. Since then, the INR weakened by roughly 5%, declining by more than 2% in 2026 alone. Only a few weeks ago, the INR hit a record low of 92 per dollar. However, on Tuesday, it rebounded sharply.

Lowering Of Tariffs On Indian Imports

Earlier, on 2 January 2026, the US President, Mr Donald Trump, announced his decision to reduce tariffs on Indian imports to 18% from 50% through a social media post. This marked the revival of India-US trade relations, which had weakened severely in the previous months.

Experts believe that lower tariffs have put India in a very good position to import goods to the United States of America (USA) and secure better deals. Now, India has a direct advantage over other Asian countries facing relatively higher tariffs, such as Pakistan (19%), Bangladesh (20%), and China (25% to 30%).

As per Amit Pabari, the Managing Director at CR Forex Advisors, “India now benefits from one of the lowest US tariff rates in Asia, improving export competitiveness and supporting a more stable external balance. For the rupee, this implies a lower risk premium over time.

Rupee May Strengthen Further

The announcement of the lower tariffs and the India-US trade deal has boosted market sentiments. Experts believe that the Indian Rupee can continue to climb in the upcoming days and can reach around 89 to 89.5 per dollar.

Anindya Banerjee, Head of Currency Research at Kotak Securities, has predicted near-term support for INR. Anindya said that the recent tariff cuts have created favourable conditions to support the appreciation of the INR in the near term. However, he also added that the extent of the gains will largely depend on when the Reserve Bank of India (RBI) decides to intervene in the currency markets.

Sources:

Financial Express

Bhaskar English

The Economic Times