Rupee at all-time low! Currency slumps 45 paise to close at 88.73 against US dollar; Visa fee shock, FII outflows add pressure
The rupee depreciated 45 paise to settle at a fresh all-time low of 88.73 against the US dollar on Tuesday, weighed down by sustained foreign fund outflows and concerns over the steep hike in the US H-1B visa fee, which exporters fear will hit India’s IT services sector.Forex traders said the local currency extended losses as markets assessed the likely repercussions of the new $100,000 H-1B visa levy, PTI reported. The measure is seen as a potential drag on remittance growth and services exports, sparking risk aversion in domestic markets.At the interbank foreign exchange, the rupee opened weak at 88.41 and slipped further to hit an intraday record low of 88.82. It finally settled at 88.73, down 45 paise from its previous close of 88.28. On Monday, the rupee had already dropped 12 paise.“We expect the rupee to remain weak as the US visa fee hike issue may continue to dampen domestic market sentiments and may result in foreign outflows. However, overall weakness in global crude oil prices may support the domestic currency,” said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan, quoted PTI.Choudhary added that any intervention by the Reserve Bank of India (RBI) may provide support at lower levels. “Traders may take cues from PMI and current account balance data from the US. Traders may also track US President Donald Trump and Fed Chair Jerome Powell’s speech,” he said, projecting the USD-INR spot range at 88.45–89.20.Meanwhile, the dollar index, which tracks the greenback against six peers, was marginally lower at 97.28. Brent crude futures, the global benchmark, rose 0.41 per cent to $66.84 a barrel.On the domestic equity front, the Sensex slipped 57.87 points to end at 82,102.10, while the Nifty shed 32.85 points to settle at 25,169.50. Foreign Institutional Investors (FIIs) remained net sellers, offloading shares worth Rs 3,551.19 crore, according to exchange data.Dilip Parmar, Research Analyst at HDFC Securities, said the rupee was undergoing a steady depreciation, now marking its second straight session of losses. “The rupee is the weakest performer among Asian currencies. The downturn is being driven by persistent bearish bets, external headwinds and continued outflows, despite resilient domestic data,” Parmar said.Commerce and Industry Minister Piyush Goyal is in the US leading a delegation for trade talks. The minister, accompanied by senior officials including Special Secretary Rajesh Agrawal, is scheduled to meet his US counterparts in New York to push forward negotiations on a mutually beneficial trade agreement.
