Rupee Plunges to Record Low of 88.76 as H-1B Visa Fee Shock Hits Markets

New Delhi, September 23, 2025 – The rupee plunged to its record low on Tuesday, depreciating by 48 paise to 88.76 against the US currency in afternoon trade, as markets digested the shock of US President Donald Trump’s newly announced USD 100,000 H-1B visa fee. This development added to existing pressures from weak foreign flows and external trade policy uncertainties.

Visa Fee Increase Pulls Currency Down

Market players indicated that the record-rate imposition of USD 1,00,000 on H-1B visas has increased the threat of a moderation in remittance flows and increased the risk of equity outflows from India’s IT industry. With foreign flows already battered this year, the step has dealt a double whammy to the local currency.

The rupee weakened at the interbank foreign exchange market to open lower at 88.41 and lost ground rapidly to reach its all-time intraday low of 88.76. The decline was a steep fall from Monday’s close of 88.28, when the currency had already dipped 12 paise.

Global and Domestic Pressures

Aside from the visa-related shock, other global headwinds have continued to negatively influence sentiment. Uncertainty surrounding trade policy and chronic risk aversion in markets have stretched emerging currencies to their limits. Some support came from Brent crude futures, which fell 0.51 per cent to USD 66.23 a barrel.

In the meantime, the dollar index, which measures the strength of the greenback versus six major currencies, rose 0.04 per cent to 97.38, adding to the rupee and other emerging market currencies’ woes.

Equity Markets Capture Nervous Sentiment

Equity markets also reflected the apprehensive sentiment, with investors remaining risk-averse. The Sensex fell 271.99 points, or 0.33 per cent, to close at 81,887.98, while the Nifty declined 80.65 points, or 0.32 per cent, to 25,121.70.

Foreign Institutional Investors (FIIs) pulled out Rs 2,910 crore from Indian equities on Monday, showing how quickly global policy changes like the visa fee increase are inducing capital outflows and putting pressure on India’s financial markets.

Outlook

The rupee may face further weakness if policy shocks and global uncertainties persist. IT companies, heavily reliant on H-1B visas for overseas operations, could see rising costs and reduced hiring flexibility, which may dent their earnings outlook. A slowdown in remittances could also add stress to India’s current account position.

The Reserve Bank of India (RBI) may need to intervene through dollar sales or liquidity management measures to contain volatility in the currency markets. However, with the US dollar strengthening globally and investor sentiment tilted toward safe-haven assets, any recovery in the rupee is expected to remain gradual and closely tied to geopolitical and policy developments.

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