India's currency woes worsen: rupee slumps to record low

New Delhi (The Uttam Hindu): The Indian rupee reached a new all-time low on Monday driven by concerns over potential U.S. trade tariffs which caused losses across most regional currencies. Traders anticipated that the Reserve Bank of India (RBI) would likely intervene to stabilize the currency. In early trade the rupee weakened to 87.95 per U.S. dollar surpassing its previous record low of 87.5825 from the previous week. By mid-day it was trading at 87.9325 down by 0.6% for the day. Market participants observed that state-run banks were seen selling dollars ahead of the spot market opening possibly acting on behalf of the RBI. Despite expectations that the rupee would breach the 88 mark the dollar sales helped maintain it above this psychologically significant level.

The rupee's decline came after former U.S. President Donald Trump announced on Sunday plans to impose a 25% tariff on steel and aluminum imports along with reciprocal tariffs on other countries based on their respective trade policies. Meanwhile the dollar index strengthened to 108.3, while Asian currencies dropped between 0.1% and 0.6% reflecting the broader impact of global trade concerns. The rupee's struggle serves as a reminder of the interdependence between currency markets and global trade policies. As traders and policymakers keep a close watch on further developments the fate of the rupee remains uncertain underscoring the volatile nature of the global economy.

And so as the market holds its breath the tension continues to build — will the RBI’s intervention be enough to stabilize the rupee or will it face further pressure as global trade dynamics evolve? Only time will tell.