Rupee hits all-time low of 88.79 against dollar: What’s driving the fall

The Indian rupee extended losses on Tuesday (September 23), plunging 48 paise to hit an all-time low of 88.79 against the US dollar in afternoon trade. Markets reacted to the shockwaves from the US government’s steep H-1B visa fee hike, which analysts said could weigh on remittances and India’s IT sector.

The rupee opened at 88.41 per dollar and steadily lost ground to touch the intraday low of 88.79, marking a sharp decline from Monday’s close of 88.28.

Forex traders said the H-1B visa fee increase — now set at $1,00,000 for certain applicants — has created concerns about slower remittance growth and potential equity outflows from India’s IT services sector.

Market implications of US policy move
India is the largest recipient of overseas remittances globally, with the U.S. contributing about a third of the total. Traders noted that tighter work visas could hit remittance inflows over time, adding to pressure on the currency.

“The rupee is moving towards record low levels as market participants digest the potential impact of the US visa levy on service exports and remittances,” said a Mumbai-based forex trader.

RBI likely to monitor volatility

Market observers expect the Reserve Bank of India to intervene as needed to maintain orderly markets, providing a buffer against excessive swings.

Meanwhile, the US dollar showed mixed trends in Asia as traders monitored Federal Reserve comments for signals on future interest rate moves.

–With PTI inputs

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