The Indian rupee witnessed a sharp decline, falling to 85.84 against the US dollar in its largest one-day drop in nearly three months. This significant decrease was attributed to a sell-off in the domestic equity market and a stronger dollar index. The ongoing trade tensions between the United States and China, characterized by retaliatory tariffs, have heightened risk aversion among investors, leading to capital outflows from emerging markets such as India. Consequently, the rupee faced additional pressure, resulting in its depreciation. The economic landscape remains uncertain as global factors continue to impact the currency markets, with the rupee’s performance closely tied to these external developments.