Rupee hits all-time low of 88.46 against dollar: What's putting pressure on currency

The Indian rupee slipped to all-time lows on Tuesday (September 23), weighed down by higher US tariffs and rising visa fees that dented sentiment around the currency.

The rupee opened at 88.41 per dollar, weaker than Monday’s (September 22's) close of 88.31, and quickly touched an all-time low of 88.46 in early trade.

The fall came even as the dollar eased slightly in Asian markets.

The 1-month non-deliverable forward market had already pointed to a softer opening, with contracts pricing the rupee at 88.31/32 levels.

Pressure from US policy moves

Traders attributed the weakness to Washington’s latest protectionist measures. The US announced steeper tariffs on Indian exports compared with other Asian peers, while also raising H-1B visa fees for new applications.

Market participants said the visa fee hike could hurt India’s IT services sector and slow remittance inflows from the US, which accounts for nearly a third of India’s overseas remittances.

DBS Bank noted that India remains the world’s largest recipient of remittances but warned that “steady tightening in work-related visas in the US might impact inflows” over time.

A Mumbai-based currency trader said the rupee “is likely to remain one of the weaker Asian currencies in the near term,” though the Reserve Bank of India is expected to intervene to limit excessive volatility.

Dollar softens, Fed in focus

The US dollar retreated modestly on Tuesday as traders weighed hawkish remarks from Federal Reserve officials. The Fed had cut rates last week and signalled two more reductions this year.

Markets are now pricing in a strong likelihood of another cut in October, even as officials strike a cautious tone on inflation and growth.

-With Reuters inputs

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