The Indian rupee closed at the lowest level in two weeks against the US dollar on Monday, snapping its brief rebound last week as global trade tensions and risk-off sentiment deepened across markets.
The domestic currency ended 60 paise lower at 85.84 against the greenback. The unit had opened at 85.75, marking its biggest single-day drop in six weeks. It had closed at 85.24 on Friday.
The sharp fall came amid a broader selloff in Asian currencies and equities after China retaliated to US tariffs by announcing a 34% duty on American imports. S&P 500 futures were down over 4% ahead of the Wall Street open, signalling the index could enter bear territory.
Most Asian indices tumbled, with the Hang Seng down 8.7%, and regional currencies, including the yuan, declined. A Bloomberg index tracking Asian currencies slipped to a one-month low, with the Philippine peso leading losses.
The pressure on the rupee was partially offset by a mild pullback in the dollar. The spot dollar index eased 0.07% to 102.95 by market close, while Brent crude fell 3.61% to $63.21 per barrel after Saudi Arabia cut its official selling price sharply—the most in two years.
Markets are now eyeing the Reserve Bank of India's policy decision on Wednesday. The central bank is widely expected to cut rates by 25 basis points, as concerns rise that escalating tariffs could weigh on global growth. Traders will also watch for the RBI's commentary on inflation and liquidity, which could provide cues for the rupee's near-term trajectory.
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