The Indian rupee weakened past 87 to the US dollar for the first time ever on Monday in the wake of a slump in Asian currencies and equities after US President Donald Trump’s tariff threats became a reality.

The rupee dropped to an all-time low of 87.1450 per dollar, down 0.6% from Friday. The rupee’s losses since the beginning of October are now approaching 4%.

“The macros look stacked up against the rupee and we expect it to stay under pressure over the next 6-8 weeks,” said Anshul Chandak, head of treasury at RBL Bank.

“Since it’s a new regime in the US under Trump and considering the rupee has been a relatively better-performing currency in the EM (emerging market) bucket over the last two years, we see the scope for more depreciation.”

On Saturday, Trump levied tariffs on Canada, Mexico and China, drawing an immediate response from Canada and fuelling worries of a trade war. Mexican President Claudia Sheinbaum said she would be implementing retaliatory tariffs.

“The risk of our worst fears materializing has risen” Morgan Stanley said in a note.

“Risks are skewed towards further escalation. Asia will be exposed on account of high trade orientation and seven economies run large trade surpluses with the U.S.”

Asian currencies, shares and U.S. equity futures tumbled. The Korean won, Malaysian ringgit, Indonesian rupiah and Thai baht dropped 0.9% to 1.2%.

EQUITY FLOWS

Foreign investors have already been taking out money from Indian equities on account of the country’s softening growth rate. That may pick up as Trump’s tariffs are likely to fuel fears about global economic growth.

The pressure on outflows from debt and equities can continue and a “reduced intervention strategy” by the RBI will further weigh on the rupee, RBL’s Chandak said.