INR vs USD: Rupee hits all-time low of 88.46 against US dollar

The Indian rupee hit a fresh record low on Tuesday, September 23, pressured by the US's announcement of higher visa fees, which deepened concerns over the currency’s outlook.

The rupee slipped to 88.46 against the US dollar, breaching its previous low of 88.4550 set just two weeks earlier. On Monday, the rupee settled 12 paise lower at 88.28 against the greenback.

In the interbank foreign exchange market, the rupee began trading at 88.41 but slipped further to hit an intraday low of 88.53 against the US dollar, marking a fall of 25 paise from its previous close.

What's behind the plunge in rupee?

The decline was largely driven by the steep hike in H-1B visa fees, which could slow the placement of Indian professionals with U.S. clients and squeeze the profitability of India’s IT industry. This may also dampen equity inflows, as foreign investors reassess their exposure to Indian tech companies.

Moreover, reduced worker deployment to the U.S. could curb remittance flows, cutting into India’s dollar inflows. The visa fee increase comes at a difficult time, with additional pressure already building from the 50% U.S. tariffs on Indian exports — the steepest in Asia — threatening to further hurt trade.

Dhiraj Nim, FX strategist at ANZ Bank, was quoted as saying by Reuters that the Reserve Bank of India has scope to allow the rupee to depreciate gradually. With inflation projected to remain in the 4–4.5% range for FY 2026-27, a slight weakening would be manageable.

The rupee has underperformed compared to other Asian currencies so far this year, missing out on gains from the recent drop in the dollar index. Steep U.S. tariffs on Indian exports have hurt trade prospects and reduced foreign capital inflows, putting pressure on the currency. In 2025 alone, foreign investors have withdrawn over $15 billion from Indian equities.

(With inputs from Reuters)

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