Rupee Plunged: Record Low Of 87.29 Against US Dollar

In early trading on Monday, the Indian rupee plummeted to a record low of 87.29 against the US dollar, following Donald Trump's tariff decisions on Canada, Mexico, and China, which sparked concerns of a widespread trade war.

Forex traders reported that Trump imposed 25% tariffs on imports from Canada and Mexico and a 10% tariff on China. This move marks the beginning of what could lead to a damaging global trade conflict.

The rupee continued to face pressure due to sustained foreign fund outflows and the broad strength of the American currency in the overseas markets due to unabated dollar demand from oil importers and weak risk appetite, they added.

In comparison to its previous close at 86.61, the rupee fell by 0.5%, hitting a low of 87.07 per dollar during the early session.

Furthermore, India’s forex reserves rose by $5.574 billion, reaching a total of $629.557 billion for the week ending January 24, as announced by the Reserve Bank on Friday.

“Despite domestic efforts, external factors will continue to influence the rupee’s path. Global risk sentiment, crude oil prices, and US Federal Reserve policy decisions—especially if interest rates remain elevated—will play a pivotal role in determining the rupee’s movement. Given these dynamics, volatility in USD/INR remains likely, with the pair expected to trade within the 86.30–87.10 range in the near term,” said Amit Pabari, MD, CR Forex Advisors.

The escalating trade war has heightened risk aversion, driving up safe-haven demand for the US dollar, which has surged toward the 109.50 mark, he added.