The weakening rupee has both positive and negative impacts on the Indian economy. It also means that the RBI has to choose its battles between growth, inflation and currency. We explain.

The Indian rupee plunged to an all-time low of 87.29 versus the US dollar on Monday (Feb 3) as the currency felt the heat of the new US administration raising the spectre of a global trade war.

The Indian rupee breached the 87 per dollar mark for the first time today, a steep fall from its previous close of 86.61/$ on January 31. The depreciation can largely be blamed on rising global trade tensions, sparked by new tariffs imposed by US President Donald Trump on imports from Mexico, Canada, and China.