In the wake of US President Donald Trump’s trade war on the world, the Indian Rupee (INR) fell to an all-time low of 87.1 to 1 US Dollar (USD) on Monday morning.
For some time, the INR had been on a decline, but
Trump’s announcement on Saturday of tariffs on Canada, Mexico, and China exacerbated the decline.
Compared to the previous close of 86.6162, the INR fell to all-time low of 87.1274 at the time of writing with a loss of around 0.5 per cent. The INR is expected to fall in the day, according to analysts.
The INR was not the only Asian currency to fall. The offshore Chinese yuan, which INR traders track, fell by 0.54 per cent to 7.3585 USD, adding pressure on emerging market currencies, according to CNBC TV18.
If the tariff war escalates, the rupee could see further downside, Dilip Parmar, FX research analyst at HDFC Securities, told Reuters.
Trump on Friday imposed 25 per cent tariffs on Mexico and Canada and 10 per cent tariffs on China. He carved out an exception for Canadian oil for now by imposing tariff of 10 per cent but said it would be hiked in mid-February. He also said that he would impose tariffs on the European Union (EU). Canada has already announced retaliatory tariffs.
Moneycontrol reported that the dollar index, which measures the US currency’s value against six major global peers, rose to 109.825 in early trade on Monday, against 108.370 in the previous session.
“Indian rupee falls to its lowest as Trump Tariffs kill global market and risk aversion takes a toll on all assets including gold and Crypto. Dollar reigns supreme being a safe asset which Swiss Franc and JPY all fall Rupee falls to 87.20,” said Anil Kumar Bhansali, Head of Treasury and Executive director at Finrex Treasury Advisory LLP, as per Moneycontrol.
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Rupee falls below 87 against dollar for the first time as Trump tariffs reset global market
