Mumbai, Sep 11 (PTI) The rupee slumped 24 paise and closed for the day at an all-time low of 88.35 against the US dollar, as ongoing tariff issue between India and the US weighed heavily on the domestic currency's vulnerability.

Forex traders said a recovery in the US dollar ahead of the inflation data and foreign fund outflows further dented investors' sentiments. Crude oil prices also gained over the past few sessions, putting further pressure on the rupee.

Traders noted that the rupee, which showed signs of minor recovery after US President Donald Trump gave positive signals about the India-US trade treaty, remains fragile due to dollar demand and global factors.

At the interbank foreign exchange, the domestic unit opened at 88.11 and fell to its lowest-ever intraday level of 88.49 against the US dollar. The domestic unit settled for the day at a record low of 88.35, registering a sharp decline of 24 paise over its previous close.

On Wednesday, the rupee recovered slightly and ended with a gain of 4 paise at 88.11 against the US dollar.

The unit had recorded its previous all-time low closing level of 88.18 against the dollar on September 1.

"The Indian rupee is trading near historic lows, facing pressure from strong import dollar demand, external tariff concerns and market anticipation of US inflation data and FED Reserve policy," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Bhansali further added, "The dollar index was also up touching almost 98 levels, while Brent oil prices also were up keeping the dollar bids on the higher side. The premiums were also indicating higher due to increase in interest rate differential between India and US in the last three days. The rupee is expected to be in the range of 88.25 to 88.75 on Friday." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.22 per cent to 97.99.

Brent crude, the global oil benchmark, was trading 0.25 per cent lower at USD 67.32 per barrel in futures trade.

"We expect the rupee to trade with a negative bias amid a recovery in the US dollar index and persistent FII outflows. Dollar demand from importers and ongoing tariff issues between India and US may also pressurise the rupee. However, positive domestic equities and renewed negotiations between India and US may support rupee at lower levels," said Anuj Choudhary, Research Analyst, Currency and commodities, Mirae Asset ShareKhan.

On the domestic equity market front, Sensex climbed 123.58 points to settle at 81,548.73, while the Nifty advanced 32.40 points to 25,005.50.

Foreign Institutional Investors offloaded equities worth Rs 3,472.37 crore on Thursday, according to exchange data.

Meanwhile, India and the US are natural partners and teams from both sides are working to conclude negotiations on a bilateral trade deal, Prime Minister Narendra Modi said on Wednesday in response to US President Donald Trump's remarks that efforts are on to address "trade barriers" between the two countries.

The exchange between the two leaders on social media is largely seen as part of efforts by both New Delhi and Washington to reset ties that witnessed increasing stress in the last few weeks after Trump doubled tariffs on Indian goods. PTI DRR HVA

Currency depreciation pressures rupee amid trade friction and dollar strength, weighing on markets and investor sentiment. The rupee hit a fresh closing low driven by strong dollar demand, foreign portfolio outflows, rising crude prices and widening interest rate differentials; analysts noted an ongoing tariff dispute between India and the US, heightened exchange rate volatility and a negative bias for the rupee, while positive domestic equities and resumed negotiations may provide limited support.