Rupee hits record low as Trump wins 2024 US election, Dollar strengthens globally

Following the U.S. 2024 election that saw the return of Donald J. Trump to the presidency, the Indian Rupee dropped to an all-time low, reaching 84.29 against the U.S. Dollar. The strengthening of the U.S. Dollar, spurred by market reactions to Trump’s victory, has caused ripple effects globally, impacting major economies including India.

Trump’s return marks a Republican victory over Vice President Kamala Harris, who led the Democratic ticket after President Joe Biden's term. The post-election rally boosted U.S. stock markets and propelled the Dollar’s value, reflecting optimism among investors regarding Trump’s pro-business policies and market-friendly stance.

With the U.S. Dollar gaining strength as the world’s reserve currency, countries with relatively weaker economies are feeling the strain. For India, the depreciation of the Rupee adds pressure on imports, especially oil, and heightens inflation concerns. A strong Dollar also impacts emerging markets, as it makes U.S. assets more attractive, potentially drawing investments away from markets like India.

Ironically, Trump’s campaign highlighted plans to lower the Dollar’s value to make U.S. exports more competitive, a stance he adopted to boost domestic manufacturing. However, market enthusiasm surrounding his policies has had the opposite effect, driving up the Dollar's value.

For India, the record-low Rupee presents challenges but also opportunities, as export-driven industries may benefit. However, rising import costs and inflation remain pressing concerns as global markets react to the shifting dynamics in U.S. policy and currency strength.