The Indian rupee fell to an all-time low against the US dollar on Friday, hitting 86.65, down from 86.56 the previous day.
This sharp dip marks the rupee’s worst performance in January 2024.
US tariff threats weigh on the Rupee
A major factor behind the rupee’s slide is the renewed warning from US President Donald Trump about imposing a 100% tariff on goods from BRICS nations, including India. This threat, combined with concerns about portfolio outflows, has spooked investors and added downward pressure on the rupee.
Alongside this, foreign portfolio investors have been pulling out of the Indian market. In January, nearly $9 billion worth of local stocks and bonds were sold by foreign investors, adding pressure to the rupee.
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In addition to tariff threats, the rupee has been weighed down by expectations of an interest rate cut by the RBI in the upcoming policy meeting.
This, along with the decline in global markets, has caused the rupee to fall by about 1.2% in January.
Markets and Union Budget 2025
Finance Minister Nirmala Sitharaman is to present the Union Budget 2025, today at parliament. The speech, scheduled to begin at 11 AM, and is one of the key events for the Indian economy.
In light of the budget, the Indian stock and commodity markets will remain open for a special trading session today, February 1. The full session will run from 9:15 AM to 3:30 PM, with commodity trading continuing until 5:00 PM.
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