Rupee Hits Record Low Of 84.32 Against Dollar After Trump's Victory

The Indian rupee hit an all-time low of Rs 84.32 against the US dollar on Thursday. The sudden depreciation of the rupee comes as Republican candidate Donald Trump won the US presidential election. It is expected that his inflationary policies may further boost the dollar’s strength.

The dollar index climbed nearly 1.5 percent to a four-month high of 104.9; meanwhile, the Asian currencies have declined as much as 1.2 percent as initial trends signalled an edge for Republican candidate Donald Trump, who has been prompting interest in so-called ‘Trump trades.’

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Within one day after the election, the rupee had fallen by 17 paise, marketing its steepest decline in four months. According to data from the Clearing Cooperation of India, the rupee hit an intra-day low of Rs 84.33 per dollar.

The Forex dealers noted that the investors had adopted a cautious stance ahead of the US Federal Reserve’s meeting outcome.

Adding further pressure on the rupee, the US 10-year Treasury yields have also surged, rising by 17 basis points to a four-month high of 4.44 percent. The market participants attributed the rise to Trump’s possible return to policies that favour anti-dumping duties and tariffs.

“With Trump’s stance on tariffs and his history of expansionary policies, inflation may rebound in the US, potentially leading to a tightening rate environment and higher dollar yields, directly impacting the rupee,” Jigar Pandit, senior vice president of Commodities and Currency at Sharekhan, told the Financial Express.

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The RBI is expected to maintain a cautious approach to market intervention by focusing on reducing volatility rather than trying to influence the rupee’s direction.