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The Rupee breached the crucial 87 to the Dollar mark on Monday, amid escalating trade war between US and countries such as Canada, Mexico and China and weak domestic equity markets.
The Indian unit opened weak at 89.95 per USD, down 34 paise from the previous close of 86.61. It touched a record intraday low of 87.29 (68 paise weaker vis-a-vis previous close). Currently, it is trading at 87.1675.
At the interbank foreign exchange, the rupee opened at 87.00 and slipped further to 87.29 against the greenback in initial deals, a plunge of 67 paise from its previous close. On Friday, the rupee settled flat at 86.62 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 1.30 per cent higher at 109.77.
Brent crude, the global oil benchmark, rose 0.71 per cent to $76.21 per barrel in futures trade.
Amit Pabari, MD, CR Forex Advisors, said: “The start of the week saw financial markets on edge as U.S. President Donald Trump followed through on his tariff threats, imposing duties on imports from Mexico, Canada, and China. A 25 per cent levy on imports from Mexico and Canada, alongside a 10% tariff on Chinese goods, is set to take effect on February 4.
“With Canada already retaliating, market watchers are keenly awaiting China’s response post-Lunar New Year. This escalating trade war has fuelled risk aversion, propelling safe-haven demand for the U.S. dollar, which has surged toward 109.50 levels.”
In the domestic equity market, the 30-share BSE Sensex was trading 575.89 points, or 0.74 per cent, lower at 76,930.07 points, while the Nifty was down 206.40 points, or 0.88 per cent, at 23,275.75 points.
Foreign institutional investors (FIIs) offloaded equities worth ₹1,327.09 crore in the capital markets on a net basis on Saturday, according to exchange data.
Meanwhile, India’s forex reserves increased $5.574 billion to $629.557 billion in the week ended January 24, the Reserve Bank said on Friday. In the previous reporting week, the overall kitty had dropped $1.888 billion to $623.983 billion.
The reserves have been on a declining trend for the last few weeks, and the drop has been attributed to revaluation, along with forex market interventions by the Reserve Bank of India (RBI) to help reduce volatilities in the rupee.
(With inputs from PTI)
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