Due to U.S. President Donald Trump’s implementation of fresh tariff measures, the Indian rupee fell to a new record low of 87.9563 against the US dollar on February 10. Compared to the previous trading session, when it opened at 87.4275 vs the US dollar, the local currency was significantly weaker at 87.9175.
On February 9, US President Donald Trump declared that he would impose 25% tariffs on all aluminum and steel imports. On Sunday, Trump told reporters on Air Force One that the tariffs would be applied to all metal imports from all nations. He did not say when the obligations will be implemented.
Later in the week, Trump also promised to impose reciprocal tariffs on nations that impose import taxes on the United States. Trump stated that the tariffs won’t take effect on the same day as the announcement, which might happen on Tuesday or Wednesday but shortly thereafter.
As a result, the dollar index rose to 108.336 at the start of trading, up from 108.040 during the previous session.
The Reserve Bank of India’s monetary policy announcement was not more dovish than anticipated, which gave the local currency confidence on February 7 and caused it to rally less.
The RBI MPC lowered the repo rate by 25 basis points to 6.25 percent to stimulate a faltering economy during its first meeting under new central bank governor Sanjay Malhotra. A unanimous decision was made by the rate-setting panel to maintain the “neutral” posture.
A week following the presentation of the FY26 Budget by Finance Minister Nirmala Sitharaman, the rate drop is the first in nearly five years. The RBI predicted that GDP will expand by 6.7% in the upcoming fiscal year. At 4.8 percent, the inflation forecast for the current fiscal year is unchanged.
