📰 Today’s Highlights – 7 August 2025
The rupee continues to face intense pressure, inching near its all‑time low around ₹88/USD, as 50% U.S. tariffs loom and exotic importer dollar demand rises. The RBI shielded the currency via dollar interventions. India’s FX reserves dipped roughly USD 9.3 billion as of 1 August to about USD 688.9 billion, but reserves remain sufficient to cover nearly 11 months of merchandise imports. Relations with the U.S. reached their lowest point as trade talks unraveled and new tariffs took effect; India now braces for a potential further diplomatic realignment.
Daily Current Affairs – MCQs (7 August 2025)
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How much did India's forex reserves fall to by 1 August?A) USD 700 billionB) USD 688.9 billionC) USD 678 billionD) USD 650 billionAnswer: B) USD 688.9 billionExplanation: FX reserves dropped by about USD 9.3 billion as RBI intervened to support the rupee amid tariff shock and capital outflows.
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What significant risk triggered trader caution on the rupee?A) RBI rate hikeB) 50% U.S. tariffsC) Domestic election uncertaintyD) ECB policy shiftAnswer: B) 50% U.S. tariffsExplanation: Trump’s executive order doubling tariffs to 50% against Indian imports—especially those related to Russian oil—triggered steep market anxiety.
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What is the rupee’s likely opening band in offshore NDF quotes?A) ₹87.20–87.50B) ₹87.80–88.00C) ₹88.00–88.04D) ₹88.10–88.50Answer: C) ₹88.00–88.04Explanation: Forecasts indicated an opening in the ₹88.00–88.04 zone, near its record low of ₹87.95.
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How did the RBI prevent the rupee from breaching ₹88?A) Raised interest rateB) Sold dollars via state-run banksC) Announced fixed rate pegD) Banned dollar forward tradingAnswer: B) Sold dollars via state-run banksExplanation: The RBI stepped into markets, selling USD to limit intraday depreciation toward all-time lows.
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Which sectors are most impacted by the new 50% tariffs?A) IT & pharmaB) Textiles, footwear, gems & jewellery, auto componentsC) Agriculture onlyD) Telecom servicesAnswer: B) Textiles, footwear, gems & jewellery, auto componentsExplanation: Key export segments—especially textiles, gems and jewelry, footwear, and auto parts—face steep tariffs, affecting nearly 50–55% of U.S.-bound exports.
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How are India–U.S. trade ties described after recent developments?A) Strengthened via energy pactB) At their lowest since early 2000sC) Stabilized through diplomacyD) Expanding under new FTAAnswer: B) At their lowest since early 2000sExplanation: Analysts note the tariffs mark India–U.S. relations' lowest point since mid-1990s-era standoffs.
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How many analysts say the new tariffs may cut Indian exports’ competitiveness?A) 10%B) 30‑40 bps GDP dragC) 5%D) No measurable impactAnswer: B) 30‑40 bps GDP dragExplanation: Economists warn the move could slash India’s GDP growth by 0.3‑0.4% through export disruption.
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What trauma did economists highlight about India’s trading position?A) Losing trade to AustraliaB) Being penalized as “trade example”C) Exporting too much to EuropeD) Currency overvaluationAnswer: B) Being penalized as “trade example”Explanation: Global Trade Research Initiative suggested India is being singled out to send a broader message in Trump’s tariff policy.
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What future could stabilize trade talks despite current tensions?A) Dramatic energy realignment toward ChinaB) Phased reduction in Russian oil importsC) Joining WTO dispute resolutionD) Immediate tariff repealAnswer: B) Phased reduction in Russian oil importsExplanation: Officials suggest reducing reliance on Russian crude could reopen negotiation space with the U.S.
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How is the rupee outlook described short‑term?A) Strong appreciationB) Volatile with depreciation risk near ₹88C) Stable around ₹85.50D) Pegged to the dollarAnswer: B) Volatile with depreciation risk near ₹88Explanation: Elevated tariff fears, oil demand, and outflows keep downward pressure, with RBI buffering but volatility expected.
✅ Summary:
Today’s quiz captures the deepening impact of U.S. tariff escalation to 50% on exports, RBI interventions to stem rupee weakness, significant FX reserve drawdown, collapses in trade talks, and the near-term volatility expected in currency and export-driven sectors.
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