The Indian Rupee (INR) fell to an all-time low of 87.1 per U.S. Dollar (USD) on Monday morning. This sharp decline followed US President Donald Trump’s decision to impose new tariffs on multiple countries.

Rupee Continues to Decline

For some time, the INR had been weakening. However, Trump’s announcement on Saturday about tariffs on Canada, Mexico, and China made things worse. As a result, the rupee dropped to 87.1274 per USD from its previous close of 86.6162, marking a 0.5% decline. Moreover, analysts expect the currency to weaken further throughout the day.

Other Asian Currencies Also Affected

Notably, the rupee was not the only Asian currency to suffer losses. The offshore Chinese yuan, which INR traders closely monitor, also declined. Specifically, it fell 0.54% to 7.3585 per USD. According to CNBC TV18, this added more pressure on emerging market currencies.

Tariff War Could Push Rupee Even Lower

Furthermore, FX research analyst Dilip Parmar from HDFC Securities warned that if the trade conflict continues to escalate, the rupee could weaken even more. On Friday, Trump imposed a 25% tariff on imports from Mexico and Canada, along with a 10% tariff on Chinese goods. In contrast, he temporarily spared Canadian oil by applying only a 10% tariff. Nevertheless, he announced plans to raise this rate in mid-February. Additionally, he confirmed that he would soon impose tariffs on the European Union (EU). Meanwhile, Canada has already retaliated with its own tariffs.

Dollar Strengthens, Rupee Struggles

At the same time, the U.S. dollar gained strength. According to Moneycontrol, the dollar index, which measures the U.S. currency’s value against six major global currencies, rose to 109.825 on Monday, up from 108.370 in the previous session. Consequently, this put further downward pressure on the rupee.

Market Expert’s Perspective

Summing up the situation, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisory LLP, stated: "Indian Rupee falls to its lowest as Trump Tariffs kill global market and risk aversion takes a toll on all assets including gold and Crypto. Dollar reigns supreme being a safe asset which Swiss Franc and JPY all fall Rupee falls to 87.20." Overall, with rising tariffs and global economic uncertainty, the Indian rupee faces continued challenges in the near future.