Rupee ends record low of 88.76/USD as H-1B visa fees adds to worries over FPI outflow

Indian rupee

The Indian rupee ended record low of 88.76 against the US dollar on September 23 as uncertainty over the proclamation of US H-1B visa fees and Trump’s tariffs weighed on the extent of outflow from India, thus impacting dollar demand.

Rupee’s weakness tracks the H-1B visa fee hike, and the potential hit to profitability of India's IT companies. This may weigh on equity inflows as foreign investors may reassess their holding in domestic IT shares.

During afternoon trade, the rupee hit a record low 88.8025 against the US dollar, as compared to 88.4137 at open and 88.3163 at previous close. This is the rupee’s highest intraday fall in September, depreciating by 0.50 percent against the greenback in a day.

“The tariff issue continues to rattle Indian markets. FPIs are buying dollars and selling equities, putting money in Western markets. Post the tariffs, the $100,000 visa fee has made FPIs further sell equities worth Rs 2,900 crore after two days of small buying,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

Bank of Baroda India Economics report too has said that the rupee has remained under pressure tracking the visa policies.

"For the rupee, the pressures have increased in terms of tariffs kicking in at 50% and the recent visa news is incrementally negative for equity flows, especially into the IT sector," Reuters quoted Dhiraj Nim, FX strategist at ANZ Bank.

Rupee’s weakness is in-line with its other Asian currencies. The Indonesia Rupiah is weaker by 0.36 percent, Thai Baht has declined by 0.22 percent, Philippine Peso down by 0.17 percent and South Korean Won lower by 0.1.4 percent, according to the Bloomberg data.

The hike in fresh H-1B visa fee from next year has sparked worries over lower remittances, and potential equity outflows from India’s IT sector, which could be a double hit that the rupee could ill afford, at a time when foreign inflows have already been weak. FPIs have sold more than $15 billion worth of Indian equities so far in 2025.

The Reserve Bank of India likely sold dollars via state-run banks near the 88.50 level to support the rupee, Reuters reported.

On Sept 19, 2025, US President Trump had signed a proclamation levying a $100,000 payment requirement on most H-1B visa petitions from outside the US.