Mumbai: The Indian rupee fell 19 paise to 85.63 against the US dollar in early trade on Monday, influenced by the ongoing global trade war. The conflict, triggered by reciprocal tariffs between the US and China, has led to significant sell-offs in equity markets worldwide, pushing them to record lows.
Forex traders noted that despite a sharp decline in crude oil prices and a weaker US dollar, the rupee struggled due to persistent foreign fund outflows amid global market instability.
Market Concerns and RBI’s Key Decisions
Market participants are closely watching the Reserve Bank of India’s monetary policy committee, which began a three-day meeting on key interest rates. The panel’s decision, expected on Wednesday, could further influence currency movements.
At the interbank foreign exchange, the rupee opened at 85.79 and slightly improved to 85.63, marking a 19-paise drop from the previous close. On Friday, the rupee had settled 14 paise lower at 85.44 after a 22-paise gain on Thursday, following the US’s reciprocal tariff implementation.
Global Factors Impacting Markets
The dollar index was 0.05 per cent lower at 102.71, reflecting the weakened greenback due to disappointing PMI data and global growth concerns. Brent crude fell 2.73 per cent to USD 63.79 per barrel amid the US-China tariff war and OPEC+ output decisions.
In domestic equity markets, the BSE Sensex plummeted 4% to 72,350.37, while the Nifty dropped 4.44 per cent to 21,887.70. Foreign institutional investors offloaded equities worth Rs 3,483.98 crore on Friday.
RBI’s Forex Reserves and PMI Data
India’s forex reserves rose to USD 665.396 billion, marking the fourth consecutive weekly increase. Meanwhile, India’s services PMI eased slightly to 58.5 in March, reflecting softer demand and easing inflationary pressures.
