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Rupee falls 60 paise against dollar

The fall represents the steepest drop since March 21 and reflects the mounting trade tensions and sharp equity market downturn, forex dealers said.

The rupee, which plummeted to the 88 level in February this year, had recently appreciated in the wake of the weakness in the dollar as the US markets were roiled by the tariff hike. (Source: Pixabay)

With the stock markets in a turmoil, the Indian rupee on Monday fell to close at a multi-week low of 85.84 against the US dollar, a substantial 60 paise decline, as risk sentiment continued to be extremely negative on uncertainties around how US tariffs will reshape the global trade order.

The fall represents the steepest drop since March 21 and reflects the mounting trade tensions and sharp equity market downturn, forex dealers said. The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.14 per cent to 102.88.

“The rupee traded weak as global capital markets witnessed a sharp plunge following escalation in US-China tariff tensions. China’s retaliatory move to impose tariffs on 355 US products has intensified concerns over a prolonged trade conflict, dampening investor sentiment worldwide,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities

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The heightened uncertainty has triggered risk-off sentiment, leading to outflows from emerging markets, including India, thus weakening the rupee. Until there’s clarity or resolution in tariff negotiations, markets are likely to remain volatile, said an analyst.

The rupee, which plummeted to the 88 level in February this year, had recently appreciated in the wake of the weakness in the dollar as the US markets were roiled by the tariff hike.

“The rupee had taken the route of appreciation now with the dollar becoming weaker. But will the dollar stay weak or will it get stronger? One can’t be too sure and hence the exchange rate cannot be taken for granted in either direction,” said a Bank of Baroda report. FPI flows all over the world have become jittery as the tariff rollout has affected all nations and the stock markets have become nervous. This will be a major consideration for the RBI as FY26 will continue to bring the same kind of emotions on the forex side as we did see in FY25, it said.