The Indian rupee weakened to 87.5 per USD in late July, extending its plunge for the month to the weakest since reaching the record low of 88 in February amid a worsening trade outlook with the US and dovish outlook for the RBI. US President Trump signaled that he might tariff India at a rate around 20-25% on Friday as the country refrained from striking a deal with their US counterparts. The move followed signals from Indian diplomats stating that an eventual agreement would take time, denting demand for goods from one of India's main trading partners. On the monetary policy front, consumer inflation feel to a six-year low of 2.1%, well below market expectations, to test the lower bound of the RBI's inflation tolerance band of 2%. Consequently, markets expect the RBI to continue reducing its benchmark policy rate this year.