Indian rupee depreciated against the US dollar on Tuesday weighed down by a strong American currency overseas and unabated foreign capital outflows. Sentiments were downbeat as credit rating agency Crisil has said that the gross non-performing assets for the banking system's micro, small and medium enterprises (MSMEs) portfolio are likely to rise moderately to about 3.9% by FY26-end. It added that the 50% tariffs imposed by the US on Indian exports will primarily contribute in increase of the dud assets. Traders overlooked the report that World Bank in its South Asia Development Update has raised India’s growth forecast to 6.5 percent for FY26 from its earlier projection of 6.3 percent in June. On the global front, ringgit closed marginally higher on Tuesday against the US dollar amid renewed buying interest.

Finally, the rupee ended at 88.77 (Provisional), depreciated by 03 paise from its previous close of 88.74 on Monday. The currency touched a high and low of 88.79 and 88.72 respectively.