Indian Rupee Falls to Record Low as Global Trade Tensions Escalate

The Reserve Bank of India is expected to cut interest rates this week to address economic pressures, while markets react to US-China tariff conflict and foreign fund outflows.

• The Indian rupee dropped 19 paise to 85.63 against the US dollar on April 7, 2025, reaching a record low due to global trade tensions and foreign fund outflows.
• The US-China trade war, marked by reciprocal tariffs, has disrupted global markets, causing significant sell-offs in equities and further weakening emerging market currencies.
• India's equity markets saw sharp declines, with the Sensex and Nifty falling 4% and 4.44%, respectively, as foreign investors sold off equities worth ₹3,483.98 crore.
• The Reserve Bank of India is widely expected to announce a 25 basis point rate cut on April 9, 2025, to support economic growth and stabilize market conditions.
• India's forex reserves have grown for the fourth consecutive week to $665.396 billion, while bond yields have dropped significantly, reflecting market expectations of accommodative monetary policy.

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