Rupee hits record low amid rising US visa fees and tariffs

Synopsis

The Indian rupee plummeted to a record low of 88.7975 against the dollar, becoming the worst-performing Asian currency due to rising US visa fees and trade tensions. These factors threaten India's IT sector and remittances, exacerbating pressures from high tariffs and weak foreign investment. The RBI's limited intervention suggests a possible strategy to aid exporters amidst trade uncertainties.

Mumbai: The Indian rupee hit a fresh record low at 88.7975 per dollar on Tuesday, making it the worst performing currency among its Asian peers for the day.

The rupee is under pressure because of a sharp rise in US visa fees, which is seen threatening the country's IT sector and remittances, compounding pressures from high tariffs and weak foreign investment into the domestic equity market.

The double-whammy of visa fees and higher US tariffs has exerted pressure on the rupee, which has fallen 3.5% against the dollar since the start of 2025, the worst performing in Asia.

Agencies

Thai Baht, which is the second-best performing currency appreciating over 7%, rose to four-year year high two weeks ago because of a sharp jump in gold exports.

The rupee opened lower on Tuesday despite a weaker dollar index in the early Asian trade. Within minutes it breached its previous record low of 88.4550 per dollar hit about a fortnight ago.

Intraday, it fell more, and stop-losses were triggered once it crossed 88.50 level. It settled at 88.7550 per dollar on Tuesday compared with the previous close of 88.3075/1$.

Agencies

"The hike in H-1B visa fees sparked worries over remittances and potential equity outflows from India's IT sector. Overall, in the last three months, domestic equity FPI outflows have been worth ₹60,000 crores backed by global trade uncertainties and India-US tariff uncertainty continue to prevail," said Kunal Sodhani, head-treasury at Shinhan Bank.

According to experts, India is likely to be disproportionately impacted by the H-1B visa fee hike, as it accounts for a large share of applicants. The $100,000 fee may hit project delivery, thereby impacting revenues of IT companies. Meanwhile, lower deployment of workforce may lead to slowdown in remittances inflows.

Currency dealers said the Reserve Bank of India likely stepped in to stem the volatility, but its presence was limited. Reuters reported on Tuesday that the central bank likely sold dollars via state-run banks near the 88.50 level to support the rupee before allowing it to slide further.

"RBI was conspicuous by its absence in the fall of rupee, probably trying to help exporters to some extent to mitigate the aftereffects of the tariffs on the Indian exports," said Finrex Treasury Advisors.

With no concrete outcome on the India-US bilateral trade talks, treasury officials and currency dealers are seeing the possibility of the rupee hitting 89 per dollar level in the near term.

...moreless

...moreless