The Indian rupee has hit a new low. The Rupee collapsed to over 87 against the US dollar. This comes after the Union Budget 2025, which was presented on February 1.

Indian Rupee Slips Further

In addition, this fall in the value of the country's currency is also being attributed to the larger global volatility that has been set in motion by US President Donald Trump's tariff war.

The Union Budget for 2025-26 was presented on February 1, 2025 by Nirmala Sithraman. The budget was hailed for being consumption-oriented aiding the middle class of the country, while it for many lacked the impetus to make India an industrial powerhouse.

The Tariff War

When we look at the tariffs that have been sprinkled by Donald Trump, the new administration, as promised during its campaign, has taken on all its close allies and major trading partners.

Donald Trump, as promised in the campaign trail in 2024, has imposed a flat 25 per cent tariff on Mexico, and Canada, two of its neighbours and largest trading partners. In addition, Trump also imposed another 10 per cent tariff on China.

Along with that, Trump has also said, or rather threatened, that he intends to impose these tariffs on the European Union, which according to him has wronged the US. He also did not rule out belting the t-word on the United Kingdom.

In addition, earlier, Trump had also underscored and reiterated his stance and intentions on imposing tariffs on BRICS, over the bloc's aspirations of de-dollarisation.

In a post on Truth Social a few days ago, Trump said the following. The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER. We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy. They can go find another sucker Nation. There is no chance that BRICS will replace the U.S. Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!"

The Declining Rupee

These developments have strengthened the US dollar further. This, as investors around the globe, sees the US dollar as a stable and far more reliable investment avenue, as compared to any other currency in the world.

When we look at the Indian Rupee, the value of the currency dipped to 87.19 against a single dollar at the time of writing. This is far higher than its previous closing of 86.56.