The Indian rupee fell to an all-time low on Tuesday, pressured by steep US tariffs and a sharp hike in H-1B visa fees, though suspected central bank intervention helped cap losses.
The currency touched 88.7975 per dollar before settling at 88.7550, down 0.5 per cent in its steepest drop in nearly a month. The rupee has now lost more than 3.5 per cent in 2025, making it one of Asia’s weakest performers.
The decline followed Washington’s decision to raise H-1B visa fees to USD 100,000 per application, a move that threatens Indian IT sector profits and remittance inflows.
HSBC economists noted that the 5.4 million Indians living in the US remit about USD 33 billion annually, warning that inflows could shrink by USD 500 million if entry is restricted for new applicants. This comes on top of 50 per cent US tariffs on Indian goods, the highest in Asia.
Equity benchmarks closed largely unchanged, though IT stocks slipped 0.7 per cent, extending a year-to-date decline of 18 per cent even as the broader market has gained 6.5 per cent.
Traders said the Reserve Bank of India likely stepped in to smooth volatility but is not defending any specific level, signalling a tolerance for gradual depreciation.
Despite ongoing pressure, market expectations for sharp rupee swings remain muted, aided by greater corporate participation in currency options and subdued offshore bets against the currency, according to HSBC’s latest emerging market sentiment survey.
