Indian rupee heads to all-time low as fallout from US visa fee hike persists

MUMBAI: The Indian rupee is poised to hit another all-time low at open on Wednesday as the fallout from the U.S. H-1B visa fee hike, coupled with weakness in other Asian currencies, compounds pressure on the currency.

The 1-month non-deliverable forward indicated the rupee will open in 88.85-88.90 range versus the U.S. dollar, dipping past the record low of 88.7975 hit on Tuesday.

The rupee on Tuesday suffered its steepest one-day drop in a month.

The currency has been under sustained pressure from hefty U.S. tariffs on Indian goods, and sentiment worsened further after Washington raised H-1B visa fees, which could disrupt the deployment of Indian IT talent to the U.S., potentially slowing IT services export growth.

Analysts at Emkay Global warn that this could drag IT services export growth below 4% in fiscal year 2026, down from an earlier projection of 5%.

Further, the higher fees could lead fewer Indian professionals to take up U.S. assignments, potentially reducing remittance inflows.

“I reckon that the visa fee hike by itself is not responsible” for the rupee’s decline, said a Mumbai-based currency trader at a bank.

It is an incremental headwind, “layering onto an already vulnerable” rupee and amplifying existing downside pressures rather than the main catalyst, he said.

Weak Asian cues

The rupee is set to face added headwinds on Wednesday amid a mildly souring risk sentiment. Slippage in other Asian currencies is intensifying the pressure, making it harder for the rupee to mount a recovery.

U.S. equities fell on Tuesday, with most Asian shares following suit, while regional currencies slipped.

Market attention remains squarely on the Federal Reserve and how many more rate cuts it may deliver later this year.

Fed Chair Jerome Powell said on Tuesday that the central bank must continue weighing the competing risks of persistent inflation against a softening labour market in its upcoming interest rate decisions.