The Indian rupee experienced a notable decline in early trading on Tuesday, depreciating by 25 paise to reach an all-time intraday low of 88.53 against the US dollar. This drop has been attributed to several unfavorable factors, including new US tariffs on Indian goods and a proposed hike in the H-1B Visa fees, which collectively impacted investor sentiments negatively.
Forex traders observed that the combination of global risk aversion and uncertainty surrounding trade policies has intensified the rupee’s downward trajectory. The rupee commenced trading at 88.41 before further losing value, ultimately touching the low of 88.53. On the previous trading day, Monday, the rupee closed at 88.28, having already depreciated by 12 paise.
Market analysts noted that the rupee’s vulnerability is exacerbated by concerns surrounding the US’s newly proposed USD 100,000 fee for H-1B visas, which could potentially lead to a slowdown in remittance inflows and limit service exports to the United States. Domestic market risk aversion is further contributing to the rupee’s weakening position.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, mentioned that the Reserve Bank of India (RBI) remains the primary source of dollar liquidity despite limited direct interventions. This limited intervention has led to increased volatility and further declines in the rupee’s value against a majority of global currencies.
In related market activities, the dollar index, which measures the currency’s strength against a basket of six major currencies, was recorded at 97.30, reflecting a decrease of 0.03 percent. Meanwhile, Brent crude oil prices also faced a decline, trading 0.62 percent lower at USD 66.16 per barrel in futures markets.
On the domestic equity front, the Sensex dropped 207.78 points, or 0.25 percent, settling at 81,952.19. The Nifty index followed suit, falling by 68.40 points, or 0.27 percent, to reach 25,133.95. Notably, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,910.09 crore on Monday, according to data from the exchanges.
To further engage with the economic challenges, Commerce and Industry Minister Piyush Goyal is leading an official delegation to the United States for crucial trade negotiations. Accompanied by the special secretary in the ministry, Rajesh Agrawal, and other officials, Goyal’s mission is to facilitate discussions aimed at achieving an early conclusion of a mutually beneficial trade agreement. The delegation is expected to hold talks in New York.
