The Indian Rupee (INR) plunged to a record low of 87.1 against the US Dollar (USD) on Monday morning. This sharp drop came after US President Donald Trump imposed tariffs on Canada, Mexico, and China.
Rupee Weakens Further
The INR had already been struggling, but Trump’s announcement accelerated its fall. The currency dropped from its previous close of 86.6162 to 87.1274, losing around 0.5%. Analysts expect more declines throughout the day.
Asian Currencies Under Pressure
The rupee was not alone in its downfall. The offshore Chinese yuan, closely tracked by INR traders, slipped 0.54% to 7.3585 per USD. This decline increased pressure on other emerging market currencies, CNBC TV18 reported.
Analysts Warn of More Losses
If the trade war escalates, the rupee could slide further. Dilip Parmar, FX research analyst at HDFC Securities, told Reuters that global uncertainty will keep the currency under pressure.
Trump’s Tariffs Spark Global Concerns
Trump imposed a 25% tariff on Mexico and Canada and a 10% tariff on China. While he temporarily spared Canadian oil with a 10% tariff, he warned that it would increase by mid-February. He also hinted at new tariffs on the European Union (EU). In response, Canada has already announced retaliatory tariffs.
Dollar Strengthens Amid Market Uncertainty
The dollar index, which tracks the USD against six major global currencies, surged to 109.825 in early trade, up from 108.370 in the previous session, according to Moneycontrol.
Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisory LLP, highlighted the impact, stating, “Indian rupee falls to its lowest as Trump tariffs kill global markets and risk aversion takes a toll on all assets including gold and crypto. The dollar reigns supreme as a safe asset, with even the Swiss Franc and JPY falling. Rupee falls to 87.20.”
With market volatility increasing, investors remain cautious as global trade tensions continue to escalate.