The Indian rupee on Tuesday (February 3) reached 90.20 against the US dollar, its biggest gain in 3 years. This rise is due to the announcement of a trade deal between the US and India, in which US President Donald Trump has reduced the tariff on Indian goods from 50% to 18%. Earlier in 2025, the rupee had fallen by about 5% and become the weakest currency of Asia. In January 2026 itself, a decline of 2% was recorded. Continuous withdrawals by foreign portfolio investors (FIIs) had kept the rupee under pressure. However, on Tuesday the rupee made a comeback and strengthened by 130 paise compared to the previous close of 91.49. The reason behind this rise in rupee after the announcement of trade deal is the ‘Give and Take’ agreement between India and America. President Trump said on social media that India will now stop buying oil from Russia and will instead buy oil from America and Venezuela. Apart from this, India has committed to buy energy, technology and agricultural products worth $500 billion (about Rs 45 lakh crore) from America in the next few years. This announcement has ended the uncertainty that had persisted since the US tariffs in August last year. Rupee can reach the level of 89. Experts believe that this rise in rupee may continue further. According to market expert Anuj Gupta, the demand for rupee will increase further due to the expectation of increase in exports. In the short term, the rupee may go towards the level of 89.50 to 89.00. Anindya Banerjee, Head of Currency Research, Kotak Securities, says that the tariff cut has opened the way for the rupee to strengthen, but it will also depend on the level at which the Reserve Bank of India (RBI) intervenes. How is the value of currency determined? If the value of any other currency decreases in comparison to the dollar, it is called falling, breaking, weakening of the currency. In English it is called currency depreciation. Every country has foreign currency reserves with which it conducts international transactions. The effect of increase and decrease in foreign reserves is visible on the price of currency. If the dollar in India’s foreign reserves is equal to the rupee reserves of America, then the value of the rupee will remain stable. If our dollar decreases, the rupee will weaken; if it increases, the rupee will strengthen.
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Biggest rise of rupee in 3 years: 1.2% stronger against dollar to 90.40 after trade deal with America
