Tracking Yuan, Rupee Declines Further; Importers Stock Up on Dollars

The rupee depreciated further on Tuesday, tracking the weakness in the yuan, amid dollar demand by importers, said dealers.

- ANJALI KUMARI

Foreign portfolio investors (FPIs), who have shifted back to a selling position in Indian equities, contributed significantly to the dollar demand.

The rupee fell by 0.5 per cent to settle at 86.26 per dollar, against the previous close of 85.86 per dollar. The Indian unit had weakened 0.7 per cent on Monday.

US President Donald Trump's recent threat of imposing a 50 per cent tariff on Chinese imports has escalated trade tensions between the US and China. Such threats amplify uncertainty in global markets, weighing on investor sentiment and leading to a flight to safety, further strengthening the US dollar. The Chinese Yuan fell to 7.35, a psychologically crucial level, said dealers. Yuan fell to its lowest level since September 2023 after indications that the Chinese central bank will be more tolerant of weak currency to counter the impact of the tariff.