Mumbai (Maharashtra) [India], February 3 : Indian rupee fell to a record low of 87.29 per dollar on Monday, weighed down by concerns over trade tariffs imposed by US President Donald Trump and global market uncertainties.
The rupee has already depreciated more than 1.5 per cent this year, and the latest decline is seen as a reaction to tariff measures imposed by the US government.
The rupee opened with a sharp gap-down of 43 paise and touched a low of 87.29 before recovering slightly to 87.13 following the Reserve Bank of India (RBI) intervention. Analysts believe this sharp fall is primarily due to the tariff war initiated by the US against Canada, Mexico, and China.
KN Dey, currency expert toldthat "Rupee opened with a gap of 43 paisa which was one of the highest gap opening, touched a new low of 87.29, but trading now at 87.13 on account of RBI intervention. This slide of the Rupee is purely on account of the Tariff war which started from February 1 with Canada, Mexico and China."
"Though Trump has been threatening BRICS countries also, it remains as to when he would press the button. This could be a knee jerk on the Rupee, but it's better to wait and watch for couple of days" the expert said.
The situation remains uncertain as US President Donald Trump has also warned of potential tariffs on BRICS countries, including India. While the impact of such measures is yet to be seen, the market is closely monitoring further developments.
The pressure on the rupee is part of a broader trend, as the US dollar strengthened against global currencies. On Monday, the Canadian dollar and Mexican peso fell to multi-year lows, while China's yuan weakened to a record low.
The US government announced imposition of a 25 per cent tariff on imports from Canada and Mexico and a 10 per cent tariff on Chinese goods, which will take effect on Tuesday.
Market experts suggest that while this could be a short-term reaction, investors should wait and watch how the situation unfolds in the coming days.
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