Rupee extends losses, slumps 48 paise to all-time low of 88.76/USD

Mumbai, Sep 23 (PTI) The rupee on Tuesday extended its losses and slumped 48 paise to hit an all-time low of 88.76 against the US dollar in afternoon trade, as markets digested the shockwaves from President Donald Trump's steep H-1B visa fee hike.

Forex traders said H-1B visa fees hike sparked worries over remittances and potential equity outflows from India's IT sector -- a double hit for the currency, at a time when foreign inflows have already been weak this year.

At the interbank foreign exchange, the rupee opened at 88.41, then lost further ground and touched an all-time intraday low of 88.76 against the US dollar, registering a decline of 48 paise over its previous close.

On Monday, the rupee depreciated by 12 paise to close at 88.28 against the US dollar.

Forex traders said the rupee is dwindling towards record low levels as market participants are analysing the likely repercussions of the US's new USD 1,00,000 H-1B visa levy, which could result in a slowdown in remittance growth and curtail service exports to the US.

Moreover, global risk aversion and trade policy uncertainty have also exacerbated the rupee's depreciation.

"Equity markets reflected the nervous mood, with investors pulling out ₹2,910 crore on Monday. The outflow underscores how global policy shocks can quickly translate into pressure on India's financial markets, keeping the rupee on edge," CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 97.38.

Brent crude, the global oil benchmark, was trading 0.51 per cent lower at USD 66.23 per barrel in futures trade.

On the domestic equity market front, the Sensex fell 271.99 points or 0.33 per cent to 81,887.98, while the Nifty was down 80.65 points or 0.32 per cent to 25,121.70.

Meanwhile, Foreign Institutional Investors offloaded equities worth ₹2,910.09 crore on Monday, according to exchange data.