The rupee weakened by 47 paise on Tuesday to hit an all-time low of 88.75 against the US dollar on Tuesday amid sustained outflow of foreign funds and a steep hike in US H-1B visa fee which may impact Indian IT services exports.
Forex traders said the rupee dropped to record low levels as market players analysed the repercussions of the new US $100,000 H-1B visa levy, which could lead to a slowdown in remittance growth and curtail service exports to the US. Risk aversion in domestic markets may also pressurise the rupee.
At the interbank foreign exchange, the rupee opened at 88.41, then lost further ground and touched an all-time intraday low of 88.82 against the US dollar, and finally settled for the day at 88.75, registering a decline of 47 paise over its previous close.
The rupee is expected to remain weak as the US visa fee hike issue may continue to dampen domestic market sentiments and result in foreign outflows. However, overall weakness in global crude oil prices may support the domestic currency.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent lower at 97.28. Brent crude, the global oil benchmark, was trading 0.41 per cent higher at US $66.84 per barrel in futures trade.
Meanwhile, foreign institutional investors offloaded equities worth Rs 2,910.09 crore on Monday. Forex traders said that headwinds such as the enhanced US tariffs on Indian goods weighed on investor sentiment.
Also read: Rupee tumbles to all-time low, forcing RBI to intervene
Follow us
