The Indian rupee has fallen to a historic low, trading at ₹88.75 against the US dollar as of 10:30 AM IST today. This marks a significant depreciation from yesterday’s close of ₹88.73, continuing a downward trend that has seen the currency weaken over the past week.
Several factors are contributing to the rupee’s decline. A primary concern is the recent increase in US H-1B visa fees, which is expected to negatively impact Indian IT services exports and reduce remittance inflows as fewer professionals may take up US assignments. Analysts warn that export growth could fall below 4% in fiscal year 2026, down from earlier estimates of 5%. Additionally, sustained foreign institutional investor (FII) outflows have put pressure on the rupee, as capital exits from emerging markets amid global economic uncertainties.
The rupee’s depreciation is also influenced by broader regional market trends. Weakening sentiment across Asia, with regional currencies and equity markets also showing declines, reflects ongoing concerns over US Federal Reserve rate decisions. Fed Chair Jerome Powell’s recent comments about balancing inflation risks with a softening labor market have kept market participants cautious, leading to a flight to safety and a stronger US dollar.
For importers, the rupee’s decline means higher costs for goods priced in foreign currencies, potentially leading to increased inflationary pressures. Conversely, exporters may benefit from the weaker rupee, as their goods become more competitively priced in international markets.
The Reserve Bank of India (RBI) has yet to announce any intervention measures. Market participants are closely watching for any signs of RBI action to stabilize the rupee. In the meantime, the currency’s performance will continue to be influenced by global economic developments, domestic policy responses, and investor sentiment.
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