The Indian rupee depreciated against the U.S. dollar on Thursday following President Donald Trump’s announcement of new tariffs on imports from several countries. The rupee opened at 85.75 against the dollar (AED23.36), reacting to Trump’s decision to impose a 26% tariff on imports from India, effective from April 9.
India’s Mumbai-based currency trader expressed relief at the relatively modest impact on the rupee, stating, “If the extent of the damage is only this much, then we will happily take it.” The trader had expected the rupee to fall further, past the 86 level, in response to the tariffs, as per Reuters.
Trump’s tariff measures include a 10% baseline rate on all imports from April 5, with higher levies on specific countries, including 34% on China and 20% on the European Union. ING Bank noted that the average tariff rate was higher than anticipated, which is expected to have a significant impact on global markets.
The announcement has hit Asian emerging markets (EM) hard, with countries like Vietnam, Korea, India, Indonesia, and Thailand facing tariff hikes ranging from 25% to 45%. The offshore Chinese yuan also weakened, dropping to a one-month low of 7.3482 against the US dollar before recovering slightly to 7.32.
U.S. equity futures dropped nearly 3%, with Japanese stocks also experiencing similar declines. Indian stocks were poised for a weak market opening, reflecting broader concerns over the economic impact of the new tariffs.
Meanwhile, U.S. Treasury yields fell as investors expressed concern about how the tariffs might slow down growth in the world’s largest economy.
