By Anjali Sharma
NEW YORK – Indian Rupee on Monday has been tracking losses in Asian currencies after US President Donald Trump said he will introduce more tariffs.
The rupee slipped 49 paise to open at an all-time low of 87.92 against the US dollar as against its Friday’s close of 87.43 per USD.
The dollar index measures the US currency against six other units, was higher at 108.3.
The interbank foreign exchange, the rupee touched an all-time intraday low of 87.95 against the American currency during the session.
Rupee pared the initial losses and finally settled on a flat note at 87.50 (provisional), unchanged over its previous close.
A Bloomberg report said that the rupee’s fall is expected to get worse as the Reserve Bank of India (RBI) may continue to build up its foreign exchange reserves.
“With the RBI maintaining its FX stance, we see a risk of rupee underperformance, as the central bank may continue to favor building a substantial FX reserves buffer,” the report quoted Nomura as stated.
It noted that not only the Indian Rupee, but all the Asian currencies slipped after the US President Donald Trump said he will impose new 25% tariffs on all steel and aluminum imports, along with reciprocal tariffs on all countries this week to match the rates levied by each country.
The Chinese Yuan dropped past 7.31 to the US dollar, while the Korean won, the Indonesian rupiah and the Malaysian ringgit were down 0.4% to 0.7%.
RBI Governor Sanjay Malhotra had said the market forces decide the value of rupee with respect to the U.S. dollar and the central bank is not worried about day-to-day movement of the currency value.
Malhotra said the central bank focuses on the value of the rupee in the medium to long term.
Indian rupee is trading with a negative bias as foreign banks went on a dollar-buying spree and importers scrambled to secure dollars, as they feared further depreciation amidst global uncertainty, media reports added.
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