23.09.202504:02:13UTC+00Indian Rupee Hits New All-Time Low

The Indian rupee reached a new historic low, trading at approximately 88.5 against the US dollar on Tuesday. This decline was influenced by elevated US tariffs and increased visa fees. Unlike other Asian countries, India faces particularly severe tariffs, and now grapples with the impact of President Trump's $100,000 charge on new H-1B visas. This fee affects Indian nationals significantly, as they represent around 71% of the nearly 400,000 visas issued in 2024. This development poses challenges for India's IT services industry and remittance inflows, while also weakening investor trust. According to traders, the Reserve Bank of India likely intervened through state-owned banks to mitigate further declines. Furthermore, there is growing anticipation of a 25 basis point interest rate cut in the upcoming September-October policy meeting. The State Bank of India suggests that with consumer price inflation expected to remain near or below 4%, reducing rates is the most prudent course of action. Meanwhile, market participants are closely observing the progress of US-India trade discussions as officials work to revive stalled negotiations in New York.