Rupee hits record lows on trade jitters, visa concerns; falls below 88.50

The Indian Rupee declined for a second consecutive day, and hit a record low as market sentiment weakened due to trade policy uncertainty and the recent increase in US visa fees.

 

The domestic currency opened 10 paise lower at 88.41 against the dollar on Tuesday, according to Bloomberg. The Rupee hit a record low of 88.52 in morning trades and has depreciated 3.35 per cent so far in 2025.  

Foreign Portfolio Investors (FPIs) remained net buyers in dollar terms even as they sold ₹2,900 crore worth of shares on Monday, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Persistent challenges, such as increased US tariffs on Indian goods and a $100,000 US visa fee for H1B visas, have pressured the rupee, pushing it closer to its record low of 88.46, he said.  

   

Donald Trump over the weekend signed an executive order raising the H-1B application fee to $100,000, from the earlier $2,000–5,000. The White House clarified it will be a one-time payment, effective September 21, potentially pressuring margins of Indian outsourcers. 

 

The Reserve Bank of India (RBI) has largely refrained from direct intervention in the currency market, allowing for heightened volatility and the possibility of further rupee depreciation, as it continues to hit new lows against major currencies, Bhansali said. 

 

As trading opens today, the rupee stands at 88.36, with a real risk of breaching its all-time low, he added. "Global risk-aversion and trade policy uncertainty has also exacerbated the Rupee’s depreciation."

 

PMI Manufacturing and Services data from India, the Euro Area, the UK, and the US will be key data points to watch out for today. Meanwhile, traders will also eye US Federal Reserve Chair Jerome Powell's speech later today. 

 

The dollar index snapped a three-day winning streak, with traders focusing on the US inflation data later this week. The measure of the greenback against a basket of six major currencies was flat at 97.34.

 

The dollar index continues to show softness with markets' attention firmly on monetary policy signals and inflation numbers for directions, Bhansali said.

 

In commodities, crude oil was trading lower as global markets focus on oversupply risks and easing demand despite ongoing geopolitical tensions. Brent crude price was down 0.62 per cent at 66.16 per barrel, while WTI crude prices were lower by 0.06 per cent at 62.64 per barrel, as of 9:00 AM IST.