New Delhi: The Indian rupee depreciated 7 paise to 88.80 against the US dollar in early trade on Wednesday, September 24, 2025, dragged down by concerns over enhanced US tariffs on Indian goods, the recent H-1B visa fee hike, and continued foreign fund outflows. The domestic currency now hovers dangerously close to its all-time intraday low.
Rupee hovers near record lows
At the interbank foreign exchange market, the rupee opened at 88.80, slipping 7 paise from Tuesday’s close of 88.73. During initial trade, the local unit also touched 88.71 against the greenback.
On Tuesday, the rupee had suffered its steepest fall in recent weeks, losing 45 paise to close at a record low of 88.73. It had also hit an all-time intraday low of 88.82 during the session.
Forex traders attributed the weakness to persistent outflows by foreign institutional investors (FIIs), combined with unfavourable global and bilateral trade developments.
Tariff hikes and visa fee burden weigh on sentiment
Investor sentiment has been dented following Washington’s decision to raise tariffs on select Indian goods and increase fees for H-1B visas, which heavily impact India’s IT and services sector.
“The H-1B visa fees has only aggravated the overall issues that India and the US need to resolve,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
He noted that the Reserve Bank of India (RBI) appears to have allowed some rupee weakening to aid exporters. “We may see new lows this week towards 89.00 before a pullback could be seen to enable importers to buy dollars,” he added.
Global factors add to pressure
Globally, the US dollar remained firm. The dollar index, which measures the greenback against a basket of six major currencies, rose 0.09% to 97.35.
Brent crude oil, the international benchmark, was trading 0.24% higher at $67.79 per barrel, keeping import costs elevated for India, a major crude importer.
The combination of a stronger dollar, high crude prices, and risk-aversion among global investors has compounded the rupee’s weakness.
Domestic markets slide
The pressure on the rupee spilled over to equity markets. The BSE Sensex fell 380.48 points to 81,721.62 in early trade, while the NSE Nifty declined 106.45 points to 25,063.05.
FIIs continued to exit Indian equities, with data showing net outflows worth ₹3,551.19 crore on Tuesday. This marked the latest in a series of heavy withdrawals that have weighed on domestic markets in recent weeks.
Outlook remains cautious
Market experts believe the rupee may face further volatility in the coming days. While exporters may benefit from a weaker currency, importers and industries dependent on global inputs face rising costs.
With policy uncertainty surrounding Indo-US trade relations and global investors adopting a risk-off stance, the rupee’s trajectory will likely depend on RBI’s intervention strategy and broader macroeconomic signals.
For now, traders expect the currency to test the 89.00 level, with any rebound hinging on easing tensions in trade negotiations or moderation in foreign outflows.
Conclusion
The rupee’s fall to 88.80 against the dollar underscores the mounting pressure from global headwinds, trade frictions, and foreign investor exits. While exporters may gain in the short term, the broader economic impact could weigh on imports and inflation, leaving policymakers with the difficult task of balancing stability and competitiveness in the currency markets.