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Rupee hits record low of 87.29 against dollar amid global trade tensions

Donald Trump’s decision to impose 25% tariffs on Canada and Mexico and a 10% tariff on China has intensified concerns about a potential trade war

Reported by:  PTC News Desk  Edited by:  Jasleen Kaur -- February 03rd 2025 11:01 AM
Rupee hits record low of 87.29 against dollar amid global trade tensions

Rupee hits record low of 87.29 against dollar amid global trade tensions

PTC Web Desk:  The Indian rupee witnessed a sharp decline of 67 paise against the US dollar on Monday, reaching an all-time low of 87.29 in early trade. The depreciation was triggered by escalating global trade tensions following fresh tariff impositions by former US President Donald Trump on Canada, Mexico, and China, sparking fears of a broader economic conflict.

Donald Trump’s decision to impose 25% tariffs on Canada and Mexico and a 10% tariff on China has intensified concerns about a potential trade war, pushing investors towards the US dollar as a safe-haven asset. Forex analysts attribute the rupee's weakness to sustained foreign fund outflows and the rising strength of the American currency in global markets, driven by persistent dollar demand from oil importers and waning risk appetite among investors.


At the interbank foreign exchange, the rupee opened at 87.00 before sliding further to 87.29 against the US dollar. This marked a significant drop from its previous close at 86.62 on Friday. Market experts believe that heightened volatility is expected in the currency markets due to escalating trade disputes and economic uncertainties.

Meanwhile, the US dollar index, which measures the greenback’s strength against a basket of six major currencies, surged by 1.30% to 109.77. This led to multi-year lows for various global currencies, with the Euro slipping to 1.0224, the British pound to 1.2261, and the Japanese yen to 155.54. Among Asian currencies, the Chinese yuan weakened to 7.3551, the Indonesian rupiah to 16,448, and the South Korean won to 1,470.

Amidst the currency turmoil, Brent crude, the global benchmark for oil prices, increased by 0.71% to $76.21 per barrel in futures trading. The rise in crude prices further compounds pressure on the rupee, given India’s heavy reliance on oil imports. Market experts expect the Reserve Bank of India (RBI) to intervene to stabilise the currency. 

The depreciation of the rupee and global economic concerns also weighed heavily on Indian equities. The BSE Sensex tumbled by 575.89 points (0.74%) to 76,930.07, while the NSE Nifty dropped 206.40 points (0.88%) to 23,275.75.

Foreign institutional investors (FIIs) continued to pull out funds from Indian markets, selling equities worth Rs 1,327.09 crore on Saturday, according to stock exchange data.

Despite the currency volatility, India’s foreign exchange reserves saw an increase of $5.574 billion, reaching $629.557 billion for the week ending January 24, according to the RBI. This rise follows a previous decline of $1.888 billion, reflecting the central bank’s ongoing efforts to manage rupee fluctuations through market interventions.

- With inputs from agencies

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