The Indian rupee experienced notable fluctuations against the US dollar in mid to late August 2025. The currency gained strength, reaching its highest level in August at 86.95 per dollar on August 19, marking a 0.45% increase and its strongest single-day gain in over six weeks. This appreciation was driven by optimism around Goods and Services Tax (GST) restructuring, easing global geopolitical tensions, softening crude oil prices, and hopes of a potential easing of US tariffs on Indian goods. The rupee's gains were also supported by expectations of a sovereign credit rating upgrade. However, the positive momentum paused shortly after, with the rupee opening lower at 87.17 on August 20 amid a stronger US dollar and weaker Asian currencies. Comments from the US Treasury Secretary regarding tariffs contributed to a subsequent weakening, with the rupee ending at 87.07 on August 20. The currency showed some recovery following policy discussions between India and the US, rising to 87.27 by August 21. Nevertheless, the rupee extended losses for three consecutive days afterward, closing at 87.53 on August 22, reflecting ongoing concerns over looming US tariffs and trade discord between the two countries. Throughout this period, the rupee's performance was influenced by external factors including US tariff policies, dollar strength, and regional economic developments.