Mumbai: Fears of a looming trade war between US and China pulled down the value of Indian currency in afternoon trade on Monday.
US President Donald Trump said that he is going to impose 10 percent tariffs on the remaining USD 300 billion of Chinese imports from September 1.
After opening at 70.20 at the interbank forex market,the rupee slumped 98 paise to 70.58 against the US dollar in early trade on Monday. At 2.40 the Indian currency was down 1.30 percent or 0.91 paise to 70.49.
Weak domestic equity market and unabated foreign fund outflows also weighed on the Indian currency.
The rupee opened weak at 70.20 at the interbank forex market and then fell further to 70.58, down
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 2,888.06 crore on Friday, as per provisional data.
Chinese yuan fell to its lowest 7-per-dollar level against the dollar since August 2010 in morning trade.
Monday`s slump past the 7-per-dollar level could further intensify the economic conflict between the United States and China. Trump has long been critical of Beijing for manipulating its currency to gain a trade advantage, and further yuan weakness could draw Washington`s wrath, a Reuters report said.