The Indian rupee experienced a notable dip on Monday, closing 15 paise weaker at 88.31 (provisional) against the U.S. dollar. This decline was largely driven by growing investor apprehension surrounding President Donald Trump’s proposed increase in H-1B visa fees. The potential policy shift has raised concerns about its ripple effect on Indian remittances and, consequently, the nation’s vital IT sector.
Currency market analysts highlighted that such a hike in H-1B visa fees could trigger a short-term outflow of equity from the Indian information technology industry, putting additional downward pressure on the rupee.
Throughout the day’s interbank foreign exchange trading, the rupee began at 88.20. It saw an intra-day low of 88.34 and a high of 88.12 before settling at its provisional close of 88.31, marking a 15-paise depreciation from its prior closing. This contrasts with Friday’s session, when the rupee showed slight strength, appreciating four paise to finish at 88.16 against the greenback.
Anuj Choudhary, a Research Analyst specializing in Currency and Commodities at Mirae Asset ShareKhan, commented on the outlook: “We anticipate the rupee to maintain a weaker stance as the U.S. visa fee increase is likely to dampen market sentiment, which will inherently impact our domestic currency.” He added that “risk aversion in local markets could further pressure the rupee. However, any prevailing weakness in global crude oil prices might offer some support at lower levels. The USDINR spot price is expected to fluctuate within the 88.05 to 88.60 range.”
Globally, the dollar index, which measures the U.S. dollar’s strength against a basket of six major currencies, recorded a minor decline of 0.12%, landing at 97.52. Meanwhile, Brent crude, a key international oil benchmark, also saw a slight drop, trading 0.21% lower at $66.54 per barrel in futures trading.
Domestically, the equity markets mirrored the cautious sentiment. The Sensex tumbled by 466.26 points to settle at 82,159.97, while the Nifty index fell 124.70 points, closing at 25,202.35. Data from exchanges revealed that foreign institutional investors were net buyers on Friday, purchasing equities worth ₹390.74 crore.
In other economic news, the Reserve Bank of India (RBI) announced on Friday that the country’s foreign exchange reserves had increased by $4.698 billion, reaching an impressive $702.966 billion for the week ending September 12. This follows a previous week’s increase of $4.038 billion, bringing the total reserves to $698.268 billion.
Adding to the week’s financial landscape, Commerce and Industry Minister Piyush Goyal is currently leading a high-level official delegation to the U.S. The primary objective of this visit is to engage in crucial trade discussions with their American counterparts, aiming to expedite the conclusion of a mutually beneficial trade agreement. Minister Goyal is accompanied by Rajesh Agrawal, the special secretary in the ministry, along with other key officials during his trip to New York.