The dollar hit a record high against the Indian rupee Thursday as the US unit rockets against other global currencies on expectations of a rise in US interest rates.

Trump's victory last week lit a fire under the greenback as investors bet his big-spending tax-cutting plans will fan inflation and force the Federal Reserve to ramp up borrowing costs.

Currencies across the globe have come under the cosh, with emerging markets hit as traders withdraw cash to invest in the United States where they expect to get better returns.

There are also fears about Trump's rhetoric during the election campaign that he would tear up global trade agreements. Already this week he said he would abandon the Trans-Pacific Partnership.

In early afternoon trading the dollar jumped to 68.8625 rupees, surpassing the previous high of 68.8450 recorded in August 2013, sparking speculation the Indian central bank will step in to provide support.

"Fears that the US Federal Reserve will raise interest rates is causing the rupee to fall," Mumbai-based forex analyst Anil Bhansali told AFP.

"Trump may bring in protectionist measures. If the US economy performs better and leads to an increase in inflation then demand for a rate hike will increase," he added.

The Indian currency has fallen more than three percent since the Trump's surprise win over Hillary Clinton on November 8.

The dollar also drove above 50 Philippine pesos for the first time since the 2008 financial crisis, while it is well up on the South Korean won, Indonesian rupiah and Malaysian ringgit.

- Rupee shake-up -

"The rupee had been strong for almost an year and many thought it wouldn't witness such a major fall but its slide has shocked many traders and created panic in the market," forex expert Subramaniam Sharma told AFP.

The slump comes three years after the rupee last hit a record low as fears the US government was going to ease back on its stimulus programme were compounded by a high budget deficit and limited foreign exchange reserves.

The latest sell-off coincides with Prime Minister Narendra Modi's shock announcement this month to withdraw from circulation the two largest denomination notes in a bid to tackle corruption and tax evasion.

The move to scrap 1,000 ($15) and 500 rupee notes left around 85 percent of bills worthless and sparked long queues outside banks as worried consumers tried to exchange their old notes for new ones.

The government has said the move will bring billions of unaccounted money into the formal banking system and ultimately boost the economy but GDP is expected to take a hit in the short term.

India's economy is highly dependent on cash, and consumer spending is likely to take a severe hit as people are left without paper currency for their daily transactions.

The uncertainty caused by the decision has also led to huge outflows of foreign capital from the Asia's third-largest economy as overseas investors opt to put their money elsewhere.

"Demonetisation has added to the rupee's slide as there is lot of uncertainty in the market about how will it pan out," N. S. Venkatesh, a currency specialist at IDBI Bank told AFP.

Source: AFP