The Indian rupee reached an all-time low of 87.95 against the US dollar on Wednesday, driven by economic challenges, unfavorable foreign investor sentiment, and the impact of President Trump's new steel tariffs. The currency's decline reflects India's escalating economic woes, exacerbated by $10 billion in foreign stock outflows and sluggish growth.
Trump's 25% tariffs on steel and aluminum imports are also impacting regional currencies, including India's. The Reserve Bank of India intervened, with exporters selling dollars and closing speculative positions, helping the rupee recover slightly to 87.4750 by close.
Domestic markets felt the rupee's fall, with the Sensex and Nifty 50 indices declining about 0.7% each, reflecting broader regional currency struggles. The offshore Chinese yuan also saw a 0.2% dip. Investors are cautious about increased market volatility, with hedging in forward markets anticipating ongoing pressure.