The Indian rupee experienced a significant decline, reaching 85.84 against the US dollar in its largest single-day drop in nearly three months. This depreciation was primarily driven by a sell-off in the domestic equity market and a strengthening dollar index. The escalating trade tensions between the United States and China, characterized by retaliatory tariffs, heightened risk aversion among investors and led to capital outflows from emerging economies such as India, exacerbating the rupee’s weakness.