Mumbai: The rupee depreciated by 7 paise from its all-time closing low to 88.80 against the US dollar in early trade on Wednesday. The decline was driven by concerns over tariff issues and H-1B visa fee hikes amid persistent foreign fund outflows.
Forex traders noted that the rupee is hovering near its record low levels due to the impact of enhanced US tariffs on Indian goods and the increase in US H-1B visa fees, both of which have dented investor sentiment. Additionally, investors’ risk aversion and trade policy uncertainties have further exacerbated the rupee’s depreciation.
At the interbank foreign exchange market, the rupee opened at 88.80, registering a decline of 7 paise compared to its previous close. In early trade, the rupee also touched 88.71 against the US dollar.
On Tuesday, the rupee depreciated 45 paise to close at a fresh all-time low of 88.73 against the greenback. It also hit an intraday low of 88.82.
“The H-1B visa fee hike has only aggravated the overall issues that India and the US need to resolve,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. Bhansali added that the Reserve Bank of India (RBI) has allowed the rupee to weaken, considering the challenges faced by exporters.
“We may see new lows this week towards 89.00 before a pullback occurs to enable importers to buy dollars,” he said.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.09% higher at 97.35. Brent crude, the global oil benchmark, was trading 0.24% higher at USD 67.79 per barrel in futures trade.
On the domestic equity front, the Sensex dropped 380.48 points to 81,721.62 in early trade, while the Nifty declined 106.45 points to 25,063.05.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,551.19 crore on Tuesday, according to exchange data.
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