The Indian rupee hit a record low of 87.17 against the US dollar on Monday, dropping 55 paise due to global market concerns following the imposition of tariffs by the Trump administration on Canada, Mexico, and China.
Forex traders attributed the rupee’s decline to a surge in the US Dollar index and weak global markets triggered by fears of a trade war after the US imposed tariffs on Canada, Mexico, and China.
Donald Trump imposed a 25% duty on Canada and Mexico and a 10% duty on China, leading to concerns about a broader trade conflict.
The rupee opened weak at 87.00 against the dollar and touched an intraday low of 87.29 during the session before closing at 87.17, marking a new all-time low and a 55 paise decrease from its previous close.
Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, expressed expectations of the rupee trading negatively due to a strong US Dollar, FII outflows, and concerns about tariffs by the US administration. However, he noted that central bank intervention could provide support to the rupee.
The dollar index was trading 1.01% higher at 109.46, while Brent crude rose 1.41% to $76.74 per barrel in futures trade.
Foreign institutional investors sold equities worth ₹1,327.09 crore on a net basis, further impacting the rupee.
In the domestic equity market, the Sensex closed 319.22 points lower at 77,186.74, while the Nifty fell 121.10 points to 23,361.05.
India’s forex reserves increased by $5.574 billion to $629.557 billion, according to the Reserve Bank. The recent decline in reserves has been attributed to revaluation and forex market interventions by the RBI.
Despite the rupee’s volatility, Finance Secretary Tuhin Kanta Pandey stated that there is no concern about its value as the RBI is managing the currency’s volatility.
Overall, the rupee’s record low is a result of global market uncertainties and trade tensions, with the currency facing pressure from various external factors impacting its value.
