The Indian rupee hit a record low on Monday, breaching 87 per dollar for the first time, as US dollar strengthened following Trump’s tariff move on Mexico, Canada and China.

The rupee fell 0.5% to a record low of 87.07 per dollar in early trade, down from its previous close of 86.61. The dollar index rose 0.3% to 109.8, while Asian currencies weakened after Trump’s tariff announcement. The offshore Chinese yuan, which the Indian traders track, declined 0.5% to 7.35 per dollar.

Donald Trump had imposed tariffs on its largest trading partners during the weekend. 25% tariffs on Mexican and most Canadian imports, and 10% on Chinese goods has been imposed with effect from Tuesday. Mexico and Canada, the top trading partners of the US, retaliated, while China vowed unspecified countermeasures.

Global markets are bracing for impact as the measures take effect. Rising crude prices added pressure on the rupee amid trade war concerns.

Meanwhile, the Reserve Bank of India is set to announce its monetary policy decision this week. The government on Saturday has already lowered its fiscal deficit estimate to 4.4% from 4.8% of the GDP signalling improved fiscal prudence.

Equity outflows added to pressure on the rupee as Indian markets opened sharply lower on Monday, tracking weak global cues. Benchmarks BSE Sensex and NSE Nifty50 fell nearly 1% in early trade. Sensex fell 439.36 points (0.57%) to 77,066.60, while the Nifty 50 dropped 152.15 points (0.65%) to 23,330.00.