Rupee drops below 87 as Trump's tariffs wallop global markets

Rupee

The Indian rupee fell to a record low during early trade on February 3 following an uptick in the dollar index after US President Donald Trump imposed tariffs on several nations.

The Indian currency fell to a record low in early trade at 87.1100 against the US dollar, as compared to 86.6162 against the greenback at previous close.

The dollar index, which measures the American currency's value against six major global peers, rose to 109.825 in early trade, against 108.370 in the previous session.

"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," said Anil Kumar Bhansali, Head of Treasury and Executive director at Finrex Treasury Advisory LLP.

US President Donald Trump on January 31 said he would impose 25 percent tariff on goods imported from Mexico and Canada and 10 percent on imports from China from February 1 onwards.

While signing executive orders at the Oval Office, Trump was asked if there was anything the nations could do to delay the tariffs. He replied, "No, no. Not right now, no."

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Trump said the oil from Canada would be charged 10 percent tariff instead of the 25 percent tariff on other goods imported from the country. He however warned that wider tariffs will be imposed on oil and natural gas later in mid-February.

Further, outflows from the Indian equities also impacted the local currency.