Rupee at New Record Low as US Visa-Fee Hike Adds to Tariff Woes

The Indian rupee fell to a fresh record after President Donald Trump’s surprise hike in visa fees added to worries over punitive US tariffs.

The currency slipped as much as 0.5% to 88.79 per dollar on Tuesday, breaching its previous low of 88.4563 hit on Sept. 11, on the steep increase in visa fees may pressure margins of Indian software firms and weigh on remittances.

The currency has weakened about 3.5% this year in Asia’s worst performance. The weakness is aiding the Reserve Bank of India’s efforts to bolster India’s trade competitiveness and offset the drag from higher US tariffs, according to Australia and New Zealand Banking Group Ltd.

“A weaker rupee is an important policy adjustment for the kind of external demand risks we are facing for manufacturing sector,” said Dhiraj Nim , forex strategist at ANZ. Low inflation gives the RBI scope to allow a calibrated weakening, he added.

The rupee has come under renewed pressure after the US announced a one-off $100,000 fee for H-1B visa applications typically used by Indian tech giants. The move is likely to hit service exports to the US, which Emkay Global Financial Services Ltd. estimates at 6%-7% of India’s gross domestic product. The fee also risks worsening foreign fund outflows from local assets.

“The developments on the H-1B visa have affected sentiment for the rupee while recent foreign outflows have also pushed the currency lower,” said VRC Reddy, head of treasury at Karur Vysya Bank. “This is why the rupee has largely ignored the ongoing dollar weakness.”

: Trump’s H-1B Fee Hike Poses Risk to India Remittances, Rupee