Indian Rupee hits record low against UAE Dirham as Trump tariffs weigh on Asian currencies

The Indian rupee fell to a historic low of 87.1450 against the U.S. dollar on Monday, following a slump in Asian currencies and stock markets after U.S. President Donald Trump's tariff threats came to fruition.

The Indian rupee fell beyond 87 against the U.S. dollar for the first time on Monday, following a decline in Asian currencies and stock markets after U.S. President Donald Trump’s tariff threats materialized. The rupee hit a record low of 87.1450 per dollar, marking a 0.6% drop from Friday’s closing value. Since the start of October, the currency has depreciated by nearly 4%.

"The macros look stacked up against the rupee and we expect it to stay under pressure over the next 6-8 weeks," said Anshul Chandak, head of treasury at RBL Bank.

"Since it's a new regime in the U.S. under Trump and considering the rupee has been a relatively better-performing currency in the EM (emerging market) bucket over the last two years, we see the scope for more depreciation."

On Saturday, U.S. President Donald Trump imposed tariffs on Canada, Mexico, and China, prompting an immediate response from Canada and raising concerns about a potential trade war. Mexican President Claudia Sheinbaum also announced plans to implement retaliatory tariffs.

Over the weekend, Trump signed three executive orders imposing a 25% tariff on most imports from Mexico and Canada, along with a 10% tariff on Chinese goods, effective from Tuesday.

The dollar index rose by 0.3% to 109.8, while Asian currencies weakened. The offshore Chinese yuan, a key currency closely tracked alongside the rupee, declined by 0.5% to 7.35 per U.S. dollar.

Foreign investors have already been pulling money out of Indian equities due to the country’s slowing growth rate. This trend may intensify as Trump’s tariffs are expected to heighten concerns about global economic growth.