The Indian rupee witnessed a sharp fall on Tuesday, plunging to a historic low of 88.75 per US dollar. The drop of 47 paise comes amid sustained selling by foreign investors and rising concerns over the massive hike in US H1B Visa Fee Shock, a move that could hurt India’s IT exports and remittances.
Rupee Opens Weak, Slips to Intraday Low
At the interbank foreign exchange market, the rupee began the day at 88.41 per dollar. As trading progressed, it slid further and touched an intraday record low of 88.82, before closing provisionally at 88.75. This marked its steepest single-day decline in weeks.
On Monday, the currency had already weakened by 12 paise to close at 88.28. The back-to-back losses reflect growing nervousness among traders and investors.
Why the Rupee is Under Pressure
Currency experts pointed to the $100,000 H-1B visa fee recently announced by the US as a key factor behind the sell-off. The higher cost of work visas is expected to hit Indian IT companies — one of the country’s biggest sources of service exports — and may dampen remittance inflows.
“The H-1B fee hike has created significant risk aversion in the market. Foreign investors are pulling out funds, which is adding pressure on the rupee. Unless the RBI steps in with strong intervention, the weakness may persist,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.
He further noted that lower global crude oil prices could lend some support, but overall sentiment remains fragile.
Global Factors at Play ahead of H1B Visa Fee
The rupee’s slide is also being influenced by broader global trends. Market participants are closely monitoring: US economic indicators such as PMI and current account data, Upcoming speeches by US President Donald Trump and Fed Chair Jerome Powell, which could sway currency markets, The Dollar Index, which tracks the greenback against six major currencies, was marginally weaker at 97.28, Brent crude oil futures rose 0.41% to $66.84 per barrel, adding to mixed cues for traders.
FIIs Withdraw Nearly ₹3,000 Crore
Adding to the rupee’s woes, Foreign Institutional Investors (FIIs) pulled out ₹2,910 crore from Indian equities on Monday. This large-scale withdrawal deepened selling pressure and dampened investor confidence.
Domestic markets also reflected the nervous mood. The Sensex slipped 57.87 points to close at 82,102.10, while the Nifty dropped 32.85 points to 25,169.50. Analysts said that higher US tariffs on Indian goods are further weighing on investor sentiment.
Government Pushes for Trade Talks
In the backdrop of rising tensions, Commerce and Industry Minister Piyush Goyal is leading a delegation to the US to hold talks on trade issues. The aim is to resolve differences and move closer to a mutually beneficial trade agreement.
The minister, accompanied by senior officials including Special Secretary Rajesh Agrawal, is expected to meet key US representatives in New York this week.
What Lies Ahead for the Rupee?
Looking ahead, experts expect the rupee to trade in the range of 88.45–89.20 per dollar in the near term. While RBI intervention could provide short-term relief, continuous foreign outflows, trade disputes, and the H-1B visa fee hike are likely to keep pressure on the Indian currency.
Also Known about:
1. Planning to Invest in JioBlackRock Flexi Cap Fund? Key Benefits & Risks Explained
For now, the rupee’s weakness highlights the challenges India faces in balancing global trade headwinds with domestic economic stability. Experts warn that the rupee’s decline could also make imports such as crude oil, electronics, and machinery more expensive, potentially fueling inflationary pressures in the domestic economy. At the same time, exporters, especially in sectors like IT and textiles, may gain short-term benefits from a weaker rupee, creating a mixed outlook.