Rupee Hits All-Time Low at 87.29 Amid Trump Tariffs, Global Trade War Fears Intensify
February 3, 2025: Rupee Reaches Record Low Amid Escalating Global Trade Tensions
Mumbai:
The Indian rupee hit a historic low of ₹87.29 against the US dollar in early trade on Monday following US President Donald Trump’s announcement of tariffs on imports from Canada, Mexico, and China. The move has heightened fears of a global trade war, causing turbulence in global and domestic markets.
Also Read: Union Budget 2025-26: New Tax Structure to Benefit 5.65 Crore Taxpayers, Boost Economy
The rupee opened at ₹87.00 at the interbank foreign exchange and further declined to ₹87.29, marking a 67-paise drop from its previous close of ₹86.62. This depreciation was attributed to sustained foreign fund outflows and strong demand for the US dollar in overseas markets.
Also Read: Things to Get Expensive in US After Trump’s Tariffs on Canada, Mexico, and China
Impact of Trump Tariffs
Trump imposed a 25% tariff on imports from Canada and Mexico and a 10% duty on goods from China. According to forex traders, this has fueled risk aversion among investors, leading to a surge in demand for the US dollar as a safe-haven currency.
Also Read: PM Modi Fully Backed Tax Cuts, Took Time to Convince Bureaucrats: FM Sitharaman
Market Sentiments
Amit Pabari, MD of CR Forex Advisors, noted, “Trump’s tariff threats materializing has put financial markets on edge, driving the US dollar index to a multi-year high of 109.77. Safe-haven demand for the greenback has surged, while Asian currencies like the Yuan, IDR, and KRW have weakened significantly.”
Key global currencies also suffered, with the Euro falling to 1.0224, GBP to 1.2261, and the Yen sliding to 155.54.
Domestic and Global Market Reaction
In domestic equity markets, the BSE Sensex dropped by 575.89 points (0.74%) to 76,930.07, while the Nifty fell by 206.40 points (0.88%) to 23,275.75. Foreign Institutional Investors (FIIs) net sold ₹1,327.09 crore worth of equities on Saturday, intensifying the pressure on markets.
Meanwhile, India’s forex reserves rose by $5.574 billion to $629.557 billion, reflecting interventions by the Reserve Bank of India (RBI) to stabilize the rupee amid heightened volatility.
Global Oil and Dollar Movements
Brent crude futures edged up by 0.71% to $76.21 per barrel, further pressuring oil-importing economies like India. The dollar index, which measures the greenback’s strength against a basket of currencies, climbed 1.30% to 109.77.
Outlook
Analysts expect the rupee to trade in the range of ₹86.65-₹87.00, with the RBI likely to intervene to cool off dollar bids. The central bank’s actions will be critical in curbing further depreciation as global markets react to escalating trade tensions.
Rupee Depreciation, Trump Tariffs, Global Trade War, Forex Market, India Economy, Sensex Decline, Nifty Losses, US Dollar Surge, RBI Interventions, Currency Volatility
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