The Indian rupee took a massive hit on Monday and slipped to a new record low against the American dollar. The domestic unit depreciated 67 paise to reach an all-time low of 87.29 against the US dollar in early trade on Monday.
This fall in the domestic currency was triggered by fears of a broader trade war after US President Donald Trump imposed fresh tariffs on Canada, China, and Mexico. The US President imposed 25 per cent duties on Canada and Mexico, and 10 per cent tariffs on Chinese goods.
Forex traders noted that this move marks the first strike in what could lead to a dangerous global trade war, reported PTI. The rupee continued to witness pressure from consistent foreign fund outflows and a strong American dollar in the global markets.
At the interbank foreign exchange, the Indian rupee opened at 87 and depreciated to 87.29 against the greenback. In the last trading session on Friday, the domestic currency closed flat at 86.62 against the dollar.
CR Forex Advisors MD, Amit Pabari, explained, “The start of the week saw financial markets on edge as US President Donald Trump followed through on his tariff threats, imposing duties on imports from Mexico, Canada, and China. This escalating trade war has fuelled risk aversion, propelling safe-haven demand for the US dollar, which has surged toward 109.50 levels.”
Meanwhile, Asian indices continued to trade in a negative territory on Monday following investors’ fears about the possibility of a trade war.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, observed, “Despite an excellent Budget, the market will be under pressure from the Trump tariffs and the heightened global uncertainty these ‘initial round of tariffs’ has triggered. Now we don’t know how this will pan out. For now, India is not affected. Therefore, the impact on the Indian market will be less. But the spike in the dollar index to above 109.6 will trigger more selling by FIIs putting the market under pressure.”
Also Read : Anupam Mittal Hails Budget 2025 Tax Reforms, Calls Them ‘Systemic Correction’. See His Post HERE
