The Indian rupee closed five paise weaker at 87.48 against the US dollar on Monday.
The domestic currency opened at a record low, weakening by 50 paise against the US dollar to trade at 87.92, according to Bloomberg data. This decline follows fresh threats of tariffs from US President Donald Trump on steel and aluminum imports. It had closed at 87.43 on Friday.
The rupee's performance comes after a rate cut by the Reserve Bank of India last Friday.
The RBI is expected to cut rates by another 25 basis points in April to promote growth, as inflation appears to be on a downward trend, according to Anil Bhansali, executive director at Finrex Treasury Advisors LLP.
US President Donald Trump plans to announce reciprocal tariffs on many countries by Tuesday or Wednesday, without specifying which countries, according to Kunal Sodhani of Shinhan Bank. Trump announced plans to impose a 25% tariff on all steel and aluminum imports.
Sodhani highlighted that for USD/INR, 87.45 acts as a support level while 87.80 serves as resistance. The dollar index gained to 108.41 after Trump's announcement, putting pressure on the euro and commodity-focused currencies like the Australian and New Zealand dollars. This move has added jitters over a potential global trade war, with China's reciprocal duties coming into effect.
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