Rupee under pressure for third day, trades near record lows at 88.73/$

Indian rupee today: The domestic currency opened 2 paise higher at 88.73 against the dollar on Wednesday

The Indian Rupee remained under pressure for the third session and traded near record lows amid foreign outflow concerns and  H-1B visa fees shock. 

 

The domestic currency opened 2 paise higher at 88.73 against the dollar on Wednesday, according to Bloomberg. In early deals, the currency fell back to 88.76, falling 3.68 per cent so far this year. 

 

On Tuesday, the Rupee hit an all-time low of 88.79 as the currency was hit with a selloff by global funds, analysts said. Foreign Portfolio investors (FPIs) sold equities worth ₹3,551.19 crore in the previous session. 

 

"A few importers who panicked at the fall in the rupee also bought dollars to ensure that they remain hedged, with no progress on tariffs despite Piyush Goyal going to the US to get the trade treaty on track," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. "The H-1B Visa fees have only aggravated the overall issues that India and the US need to resolve." 

 

The Trump administration on Tuesday said it is proposing to base allocation of the H-1B visa on skill level and wages instead of the current lottery method. 

 

Over the weekend, 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 allowed the weakening, considering the plight of the exporters, Bhansali said. "We may see new lows this week towards 89.00 before a pullback could be seen to enable importers to buy dollars."

 

On Tuesday, the HSBC Flash India Composite Output Index, which measures the combined performance of India’s manufacturing and service sectors, fell to 61.9 in September from 63.2 in August, marking a modest slowdown but still indicating a sharp rate of expansion. 

 

The dollar index advanced after Federal Reserve Chair Jerome Powell said the outlook for the labour market and inflation faces risks. The measure of the greenback against a basket of six major currencies was up 0.08 per cent at 97.34.

 

In commodities, posted slight gains driven by declining US crude oil inventories and stalled Kurdish oil exports. Brent crude price was up 0.24 per cent at 67.79 per barrel, while WTI crude prices were higher by 0.28 per cent at 63.59 per barrel, as of 9:00 PM IST.