Media Wire Express Correspondent
The Indian rupee has hit an all-time low, closing at 84.28 against the U.S. dollar, in response to the U.S. presidential election result favoring Republican candidate Donald Trump.
This marked the rupee’s sharpest single-day decline in four months as financial markets reacted to the potential economic policies of the new U.S. administration. The Reserve Bank of India (RBI) intervened by selling dollars to stabilize the rupee, though regional currencies across Asia also experienced losses.
Following Trump’s projected victory, global investors prepared for potential inflationary measures that could arise from his trade and immigration policies. Trump has indicated a willingness to impose tariffs on various imports, especially from China, a move that could impact global markets significantly. The dollar index surged over 1.5% in response, while the U.S. 10-year Treasury yield also reached new highs, reflecting market expectations of inflationary pressures and uncertainty over Federal Reserve rate cuts.
Analysts believe the rupee’s future direction will depend on the dollar’s strength and any additional RBI measures. Dhiraj Nim, a strategist with ANZ, noted that while the RBI would likely continue to “smoothen out sudden moves,” the rupee may be allowed to gradually adjust downward in line with other regional currencies if U.S. inflation pressures intensify.
The depreciation poses challenges for India, potentially driving up import costs and impacting key sectors reliant on foreign exchange. This ongoing development in currency markets could affect not only the Indian economy but also other emerging markets closely tied to U.S. economic policy shifts.
