The rupee plunged the most this year amid broad sell off in Indian markets spurred by a crash in global markets reeling under the effects of US-China trade war. The Indian currency fell 100 paise to 70.59 today compared to Friday's close of 69.59 against the US dollar.
US President Donald Trump abruptly decided on Thursday to slap 10% tariffs on $300 billion in Chinese imports, stunning markets and ending a month-long trade truce.
China vowed on Friday to fight back. In response, China's yuan weakened beyond the key 7-per-dollar threshold in a move that threatens to lead to massive capital outflows.
The US-China trade war had a negative effect on global markets. Japan's Nikkei stumbled almost 2% to the lowest since early June, while Australian shares slipped about 1% to spend their fourth straight session in the red. South Korea's Kospi tumbled 1.2% to hit the lowest since December 2016.
On the global front, the Chinese yuan fell to its lowest level against the dollar since August 2010 in morning trade on Monday. The weakening was largely owing to US President Donald Trump's plan to impose fresh tariffs on another USD 300 billion in Chinese goods.
The onshore yuan tumbled, hitting 7.0307 on Monday morning trade to reach its lowest level since 2008.
Forex traders said, besides the US-China trade related concerns, Home Minister Amit Shah moving resolution in Rajya Sabha that all clauses of Article 370 will not be applicable to Jammu and Kashmir kept pressure on the Indian rupee.
The government on Monday moved a bill proposing bifurcation of the state of Jammu and Kashmir into two union territories -Jammu and Kashmir division and Ladakh. Making the announcement in Rajya Sabha, Union Home Minister Amit Shah said the UT in Ladakh will have no legislature like Chandigarh while the other UT of Jammu and Kashmir will have a legislature like Delhi and Puducherry.
Edited by Aseem Thapliyal