Indian Rupee Hits Record Low Amid Foreign Outflows and Trade War Fears; Stock Market Plunges on Tariff Concerns

The Indian rupee concluded February with its fifth consecutive monthly decline, pressured by foreign portfolio outflows and increased hedging. The rupee closed at 87.4950 against the U.S. dollar, marking a 1% drop for the month and hitting an all-time low of 87.95. The Reserve Bank of India (RBI) intervened to curb excessive volatility. Foreign investors net sold nearly $3.5 billion in local stocks in February, bringing total outflows to approximately $12.5 billion in 2025. Simultaneously, Indian stock market indices Sensex and Nifty experienced significant selling pressure due to escalating global trade conflict fears. The Sensex fell by over 1,420 points (1.9%), while the Nifty 50 dropped by about 430.2 points (1.9%). The market capitalization of BSE-listed companies decreased substantially. This decline follows U.S. President Donald Trump's announcement of tariffs on imports from Canada, Mexico, and China, triggering concerns about a worsening trade dispute.