HYDERABAD, February 3: The Indian rupee has depreciated significantly, breaching the ₹87 mark against the US dollar for the first time in history. This decline is attributed to escalating global trade tensions following the imposition of tariffs by US President Donald Trump.
On Monday’s opening trade, the rupee weakened by 67 paise, recording an exchange rate of ₹87.29 per US dollar. This marks a substantial drop from Friday’s closing rate of ₹86.62.
President Trump has announced tariffs of 25% on imports from Canada and Mexico, and 10% on goods from China. These measures have heightened fears of a global trade war, leading to increased volatility in financial markets.
Forex traders have expressed concerns that these developments could trigger a destructive global trade conflict. Economic experts note that factors such as international uncertainty, fluctuations in crude oil prices, and announcements regarding US Federal Reserve interest rates are directly or indirectly impacting the rupee’s value. There is an expectation that the rupee’s decline may continue due to these international developments.
The depreciation of the rupee is anticipated to have widespread effects across various sectors, with potential implications for domestic price levels. Analysts warn that consumers may face higher costs for imported goods, and businesses could experience increased expenses due to the unfavourable exchange rate.
The Reserve Bank of India is closely monitoring the situation and is expected to intervene if the rupee continues to weaken. Market participants are advised to exercise caution amid the prevailing economic uncertainties.
