Indian rupee hits lifetime low, breaches 88/dollar for first time
What's the story
The Indian rupee has hit a new low, breaching the 88-per-dollar mark for the first time ever. The fall comes as markets react to the impact of new US tariffs on Indian goods. The currency fell to 88.24 against the US dollar, surpassing its previous all-time low of 87.95.
Tariff effects
US imposes additional tariffs on Indian goods
This week, the US imposed an additional 25% tariff on Indian goods, bringing the total duties to a whopping 50%. The move is expected to hurt India's exports and could put some pressure on its trade balance. "A tariff-led drag on exports could add some incremental pressure to India's trade balance," said Hari Shyamsunder of Franklin Templeton.
Market reaction
Rupee's fall reflects growing investor concerns
The rupee's fall reflects growing investor concerns about the impact of Washington's hefty levies on India's trade and growth outlook. The currency opened 6 paise lower after a surge in the dollar index, foreign selling in equities, and fears over economic impact of US tariffs weighed on market sentiment.
Diplomatic outlook
US Treasury Secretary optimistic about India-US trade talks
US Treasury Secretary Scott Bessent had recently echoed President Donald Trump's criticism of India "profiteering" from Russian oil purchases. However, he was optimistic that New Delhi and Washington would eventually reach an agreement despite the steep tariffs. "At the end of the day, we (India and the US) will come together," Bessent told Fox Business Network.