FX.co ★ Indian Rupee Stays at Record Low

The Indian rupee continues to struggle, trading around 88.7 against the US dollar, close to its all-time low. This sustained weakness is largely due to increased pressure stemming from a significant rise in visa fees and high US tariffs. US President Trump has imposed a $100,000 fee on new H-1B visas, with Indians representing approximately 71% of the nearly 400,000 visas issued in 2024. This policy is anticipated to slow the migration of Indian workers to the US, significantly impacting India's IT services sector and affecting remittance flows into the country. Additionally, substantial US tariffs on Indian products have further dampened export opportunities and restricted foreign capital inflows. In response, the Reserve Bank of India is likely to have intervened to alleviate pressure on the rupee; however, traders observed that the RBI showed minimal commitment to defending a specific exchange rate, indicating a calculated approach that might permit a gradual decline of the currency. Meanwhile, markets also focused on the Federal Reserve's policy direction, as Chair Jerome Powell highlighted the importance of balancing inflation risks with a cooling labor market.