Indian rupee hits lifetime low of 87.95 against USD—Here's why
What's the story
The Indian rupee has hit a record low of 87.95 against the US dollar in early trade on Tuesday. The decline comes after US President Donald Trump threatened new tariffs on India and additional penalties over its oil imports from Russia. Forex traders expect this downward trend could continue throughout the week due to Trump's potential tariff hike on India.
Trade tensions
Rupee falls further amid ongoing trade talks
On Monday, Trump threatened to "substantially" raise US tariffs on India, accusing it of buying large amounts of Russian oil and selling it for huge profits. As per analysts, the rupee's depreciation is due to a negative trade environment with uncertainty persisting until clarity is achieved on US trade relations. The rupee fell by 48 paise to close at 87.67 against the dollar on Monday. Earlier today, it declined further by 29 paise to near the critical ₹88 level.
Tariff history
Trump's tariffs on Indian imports
Previously, Trump had imposed a 25% tariff on Indian imports along with an unspecified "penalty" on India's purchase of Russian military equipment and crude oil. Last week, he had criticized India and Russia for their growing ties, saying they could "take their dead economies down together." In response, India highlighted its position as the world's fastest-growing major economy.