Post by : Rameen Ariff

NEW DELHI: The Indian rupee fell to a fresh record low on Tuesday, September 23, as the United States announced higher visa fees, raising concerns over the currency’s future.

The rupee slipped to 88.46 against the US dollar, surpassing its previous low of 88.4550 set just two weeks ago. On Monday, it had settled 12 paise lower at 88.28 against the greenback.

In the interbank foreign exchange market, the rupee opened at 88.41 but fell further to an intraday low of 88.53, a drop of 25 paise from its previous close.

Why the Rupee Is Falling

The decline comes after the H-1B visa fee hike by the US, which could slow the deployment of Indian IT professionals to the United States and impact profits for India’s IT sector. Foreign investors may also reassess their investments in Indian tech companies, affecting equity inflows.

Reduced worker deployment may also limit remittance flows, reducing dollar inflows to India. This visa fee increase adds to the pressure from 50% US tariffs on Indian exports, the steepest in Asia, which could further affect trade.

Dhiraj Nim, FX strategist at ANZ Bank, the Reserve Bank of India (RBI) could allow the rupee to weaken gradually. With inflation expected to remain around 4–4.5% for FY 2026-27, a slight decline in the currency would be manageable.

The rupee has underperformed against other Asian currencies this year, missing gains from the recent drop in the dollar index. In 2025, foreign investors have withdrawn over $15 billion from Indian equities, putting additional pressure on the currency.

Analysts believe the rupee may continue to face pressure if the US visa fee hike and high tariffs persist, making dollar inflows and foreign investments a key factor in stabilizing the currency.