Mon Feb 03 10:09:57 IST 2025: ## Rupee Plunges to Record Low Amidst Trump’s Trade War
**Mumbai, India –** The Indian rupee plummeted to a record low of 87.29 against the US dollar on Monday, a 67 paise drop, triggered by President Trump’s imposition of tariffs on Canada, Mexico, and China. This move, described by forex traders as the first salvo in a potentially devastating global trade war, fueled anxieties in the market.
The rupee’s decline was exacerbated by sustained foreign fund outflows and a strengthening US dollar internationally, driven by increased demand from oil importers and a generally weak risk appetite. The dollar index, which measures the greenback’s strength against major currencies, rose 1.30 percent to 109.77. This surge also impacted other global currencies, with the Euro, British Pound, and Japanese Yen all reaching multi-year lows. Asian currencies like the Chinese Yuan, Indonesian Rupiah, and South Korean Won also experienced significant drops.
The escalating trade war prompted risk aversion, boosting demand for the safe-haven US dollar. Brent crude prices rose 0.71 percent to $76.21 per barrel. Domestically, the Indian stock market reacted negatively, with the BSE Sensex and Nifty indices falling by 0.74 percent and 0.88 percent respectively. Foreign institutional investors (FIIs) offloaded Rs 1,327.09 crore worth of equities on Saturday.
While India’s forex reserves increased by $5.574 billion to $629.557 billion in the week ending January 24, analysts predict the rupee will continue to face pressure. The Reserve Bank of India is expected to intervene to mitigate further declines. Despite this intervention, analysts forecast a trading range of 86.65/87.00 for the day.
First Piper 