Indian rupee crashes to new low as global markets worry about US tariffs

Dubai: The Indian rupee has slumped to a new low against the dirham, at 23.7, after the Asian currency and stock markets weighed what would happen as US tariffs take effect.

It was just a fortnight ago – January 14 – that the INR came up to its lowest point, of 23.59 against dirham.

“The dollar’s gaining as investors seem to be piling in – and there won’t be many currencies that can withstand the pressure,” said an FX analyst. “That’s what we are seeing with the INR.”

Indian expats in the UAE who waited to send in their February remittances will benefit in the coming hours – and even days – as dollar is expected to retain its power. “King Dollar is showing all the power today,” said Neelesh Gopalan, Senior FX analyst with a Dubai-headquartered fintech.

It’s been an extremely rough ride for the INR in recent weeks, and it will take some decisive steps from the Reserve Bank of India to put a line under the currency’s continued weakening.
Other Asian currencies too are feeling dollar’s power surge.

What’s happening to Philippine Peso?
The Peso is trading at 15.98 to the dirham (or 58.74 to the dollar), but still above the 15.06 (or 59.44) that it showed on December 18, 2024.

“There could be some good for UAE expats if they wait a day or so to see how their currencies are faring against the dollar,” said Gopalan. “It’s unlikely that dollar will ease up suddenly against other currencies.
“When it comes to the Philippine Peso, a lot of the action could happen tomorrow. There is usually a lag effect with the currency.”

UAE investors ‘buy the $’
In UAE, retail investors are putting their funds into dollar trades, and given how the greenback has been faring, it does seem they are on the right track.

“The dollar has captured significant attention with its steady rise since last November’s (US Presidential) election results,” said Farah Mourad, Senior Market Analyst at Equiti Group.
“While Trump has highlighted concerns about the dollar being overvalued and hinted at potential actions to weaken it to boost US business competitiveness, his recent remarks (on tariffs) have also driven expectations of inflationary pressures. This combination of factors has added to the currency’s volatility, even as it maintains its upward momentum.”

A view backed by Farbod Mimeh, Equiti’s Global Head of Trading. “We’re seeing an active interest in the FX asset class and expect that when tariffs are formalised, the market will be hungry to digest any resultant volatility.”