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Informist, Monday, Sept. 22, 2025

By Rati Chaphekar

MUMBAI – The rupee ended sharply lower against the dollar as banks persistently bought dollars for foreign portfolio outflows in the last leg of the trade, dealers said. Dampened risk sentiment among investors after the US imposed $100,000 fee on H-1B visas and a rise in the dollar index also weighed on the Indian unit throughout the day, they said.  

"There were strong outflows in the end, which led to 88.30 (a dollar) breaking. Otherwise, it was a range bound market," a dealer at private-sector bank said. The Indian unit ended the day at 88.3075 a dollar, almost 0.3% down from its previous close. During the day, the rupee moved in a range of 19 paise. Other Asian currencies moved on a mixed note against the dollar Monday. The Indian currency was the worst performer among its peers.  

The Indian unit started the day lower against the dollar mainly due to a rise in the dollar index and a weak risk appetite among investors after US President Donald Trump Friday signed an executive order that mandates companies to pay a fee of $100,000 per year to hire foreign workers under the H-1B visa programme, dealers said. While the US government Sunday clarified that the $100,000 fee for an H-1B visa is a one-time payment applicable to those applying for a new visa and not for visa renewals or for those currently holding a visa, the new rule could cap opportunities for Indian workers in the US. The new norms may also weigh on the growth of India's services exports and reduce remittances to the country. IT stocks in the Nifty 50 closed lower by 2–3% on Monday.

"From an FX perspective, we think this development (H-1B fees change) gives us more confidence that the Indian Rupee will underperform Asian FX and core G10 crosses, but we think INR FX volatility should remain contained with the government also taking steps to structurally reform the economy including from recent GST changes," MUFG Bank said in a report. 

Further, the dollar index strengthened as traders awaited a slew of speeches by Federal Reserve officials throughout the week for further clues on the US rate outlook, after the central bank resumed its easing cycle last week. Around 10 Fed officials, including Chair Jerome Powell, are due to speak this week, with market participants watching closely for their views on the economy and the Fed's independence. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.42, against 97.65 Friday and 97.36 Thursday. The index rose to 97.82 during the day. 

Shortly after opening, the rupee had touched a high of 88.1150 as some foreign banks likely sold dollars for foreign fund inflows into corporates, dealers said. However, banks stepped in to buy dollars on behalf of importers, who wanted to make the most of the relatively lower dollar/rupee levels, which weighed on the local unit, dealers said. "Importers are just waiting for any dip (in dollar/rupee) and coming whenever its there," a dealer at another private-sector bank said. 

In the last hour of trade, weak risk appetite prompted banks to persistently buy dollars on behalf of foreign portfolio investors, looking to pull out funds from domestic equities, which pushed the Indian unit to the day's low of 88.3400. "There were large outflows (of dollars) from equities at the end, especially by foreign banks," a dealer at a state-owned bank said. At 1530 IST, the Nifty 50 was down 0.5% and the Sensex was down 0.6%. 

Some dealers said foreign fund outflows were also on account of rebalancing of the global index provider FTSE Russell. Last month, FTSE Russell announced the addition of eight Indian stocks to its All-World Index as part of its periodic index review, with effect from Monday. 

Meanwhile, the rupee found some support from optimism around the India-US trade deal, dealers said. Trade Minister Piyush Goyal is scheduled to visit the US Monday to take forward the negotiations on the proposed Bilateral Trade Agreement. 

FORWARDS

The one-year dollar/rupee forward premium ended slightly lower due to a rise in US Treasury yields as the extent of policy easing by the US Federal Reserve this year remains unclear after Fed Chair Jerome Powell's cautious tone on rate cuts, dealers said. Forwards of a currency pair are reflective of the interest rate differential between two countries. The 10-year US bond yield rose to 4.14% Friday from 4.11% Thursday.

The US Federal Open Market Committee cut the federal funds target rate range by 25 basis points last week. Fed officials guided for the rate to be at 3.50-3.75% by the end of this year, 50 bps lower than the current rate. However, Powell called the policy action as a "risk-management" cut in response to the weakening labour market, adding that the central bank is in a "meeting-by-meeting situation" regarding the outlook for interest rates.

Market participants now await a slew of US economic data this week, along with comments by several US Federal Reserve officials, including Powell, for further insight into the rate-cut trajectory of the Federal Reserve.

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.34%, against the previous close of 2.35%. On an absolute basis, the premium was 206.32 paise against 206.87 paise Friday. 

OUTLOOK

On Tuesday, the rupee will take cues from movement of the dollar index and other Asian currencies, dealers said. Traders will also closely watch for any developments in India's trade talks with the US. "I think the rupee will continue to be range bound between 87.80 to 88.40, unless there is any breakthrough in the trade deal," a dealer at a brokerage firm said.  

Dealers expect importers to continue purchasing dollars, wary of a sharp fall in the Indian unit, which may weigh on the local unit. They also expect the weak risk appetite among investors after the new $100,000 fee imposed by the US government on H-1B visa to continue to exert pressure on the Indian currency. 

However, should the rupee inch toward the crucial level of 88.50 a dollar, dealers expect exporters to sell dollars to make the most of the relatively higher dollar/rupee levels. They also expect the RBI to step in with dollar sales to slow the pace of rupee's depreciation.

On Tuesday, the rupee is seen moving in a range of 88.10 to 88.50 against the dollar, with key technical support pegged for the rupee at 88.40 a dollar.

India Rupee - World FX:Australia dlr down post central bk officials' remarks

MUMBAI – The Australian dollar slipped 0.2% against the US dollar after Reserve Bank of Australia Governor Michele Bullock said Monday that easing inflation and a resilient labour market mean policymakers have room to ease policy further if needed to deal with shifting risks.

"...the economic outlook continues to be clouded by uncertainty...So we need to be alert to the risk that circumstances may change and be prepared to respond if necessary," Bullock said. Australia's flash purchasing managers' index is due Tuesday and consumer price index data is due Wednesday. The New Zealand dollar also fell 0.2%. 

The dollar index strengthened as traders awaited a slew of speeches by Federal Reserve officials throughout the week for further clues on the US rate outlook, after the central bank resumed its easing cycle last week. Around 10 US Fed officials, including Chair Jerome Powell, are due to speak this week, with market participants watching closely for their views on the economy and the Fed's independence. At 1510 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.56, against 97.65 Friday and 97.36 Thursday.

The Japanese yen fell 0.1% against the greenback. Yoshimasa Hayashi, a top government spokesperson and a contender to become next prime minister of Japan, said on Sunday the Bank of Japan's plans to gradually raise interest rates is broadly in line with the government's thinking on economic policy. Japan's traditional aversion to a strong yen had diminished, he added. The Bank of Japan kept the interest rate steady at 0.5% Friday.

The euro rose 0.1% against the greenback whereas pound sterling rose 0.2%. The Bank of England Thursday kept its key interest rate steady at 4%, in line with market expectations, after a 25-basis-point cut last month. The Swiss franc rose 0.1% against the greenback. (Rati Chaphekar)

India Rupee: Stays dn as importers buy dlrs, risk appetite hit on H-1B news

India Rupee: Stays dn as importers buy dlrs, risk appetite hit on H-1B news

MUMBAI – The rupee remained down against the dollar as banks bought dollars on behalf of importers, dealers said. Dampened risk sentiment among investors after US President Donald Trump imposed a $100,000 fee for new H-1B visas and a strong dollar index also weighed on the Indian unit, they said.

"The H-1B news impacted the rupee at open and that negative sentiment has continued," a dealer at state-owned bank said. "We are also seeing buying (of dollars) on dips (in dollar/rupee)." Trump Friday signed an executive order that mandates companies to pay a fee of $100,000 per year to hire foreign workers under the H-1B visa programme. The US government Sunday clarified that the fee was a one-time payment, applicable to those applying for a new visa and not for visa renewals or for those currently holding a visa. 

The Indian currency had touched a high of 88.1150 earlier in the day as some foreign banks likely sold dollars for foreign fund inflows into corporates, dealers said. However, banks stepped in to buy dollars on behalf of importers, who wanted to make the most of the relatively lower dollar/rupee levels, which weighed on the local unit, dealers said. 

Further, the dollar index rose ahead of slew of speeches by Federal Reserve officials throughout the week. The dollar index has rebounded after falling to its lowest level since 2022 due to Fed Chair Jerome Powell's cautious tone on rate cuts. At 1330 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.65, against 97.65 Friday and 97.36 Thursday.

During the day, the rupee is seen moving in a range of 88.10 and 88.40 against the greenback. Dealers peg key technical support for the rupee at 88.30 a dollar.  (Rati Chaphekar)

India Rupee: Technical levels for rupee - Sept 22

MUMBAI – At 1110 IST, the rupee was at 88.1300 per dollar. At 0900 IST, the rupee was at 88.1825 a dollar, against its previous close of 88.0900. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar)

India Rupee: Down as dollar index up, risk appetite hit; India-US talks eyed

India Rupee: Down as dollar index up, risk appetite hit; India-US talks eyed

MUMBAI – The rupee was down against the dollar Monday due to a rise in the dollar index and dampened risk sentiment among investors after US President Donald Trump imposed a $100,000 fee for new H-1B visas, dealers said. "The dollar index is the main factor (for rupee) and looks like we will track equities for the H-1B news impact also," a dealer at a state-owned bank said. 

The dollar index rose ahead of a slew of speeches by Federal Reserve officials throughout the week. The dollar index has rebounded after falling to its lowest level since 2022 due to Fed Chair Jerome Powell's cautious tone on rate cuts. At 0948 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 97.80, against 97.65 Friday and 97.36 Thursday.

Trump Friday signed an executive order that mandates companies to pay a fee of $100,000 per year to hire foreign workers under the H-1B visa programme. The US government Sunday clarified that the $100,000 fee for H-1B visa is a one-time payment applicable to those applying for a new visa and not for visa renewals or for those currently holding a visa. At 0948 IST, both the Nifty 50 and Sensex were down 0.1% each. 

Further, banks bought dollars on behalf of importers, who fear a further fall in the domestic currency, dealers said. However, the Indian unit was supported by some positive sentiment around the India-US trade deal as Trade Minister Piyush Goyal will visit the US later in the day to take forward the negotiations on the proposed Bilateral Trade Agreement. "It (rupee) will be mostly range bound today (Monday). Market is looking at Piyush Goyal's visit for any cues on the trade deal," a dealer at a state-owned bank said. 

During the day, the rupee is seen moving in a range of 88.10 and 88.40 against the greenback. Dealers peg key technical support for the rupee at 88.30 a dollar.  (Rati Chaphekar)

India Rupee - Asia FX: Mixed ahead of Fed officials' speech; yuan up 0.1%

MUMBAI – Asian currencies traded on a mixed note against the dollar Monday as market participants await speeches by Federal Reserve officials this week that could provide further clues on the US rate outlook, after the central bank resumed its easing cycle last week.

The Federal Open Market Committee cut the federal funds target rate range by 25 basis points last week. However, the dollar index has rebounded after falling to its lowest level since 2022 due to Fed Chair Jerome Powell's cautious tone on rate cuts, dealers said. At 0855 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.77, against 97.65 Friday and up from 97.36 Thursday. Market participants now await a slew of economic data this week, along with comments by several US Federal Reserve officials, including Chair Jerome Powell, for further insight into the rate-cut trajectory of the Federal Reserve. 

The Chinese yuan rose 0.1% against the greenback after the People's Bank of China Monday kept its one-year and five-year loan prime rates steady for the fourth month, in line with market expectations. The one-year loan prime rate was kept at 3.0%, while the five-year loan prime rate was unchanged at 3.5%. The Taiwan dollar, however, fell 0.3% against the greenback. 

The Indonesian rupiah fell 0.1% against the greenback as investors fear that Bank Indonesia is giving in to pressure from President Prabowo Subianto, compromising its independence and risking a rupiah selloff. This sentiment strengthened after a surprise rate cut by the bank last week, as economists had expected the bank to keep the rates steady amid ongoing protests in the country and the sudden dismissal of finance minister Sri Mulyani Indrawati.

The Indonesian finance minister Friday said that the government is considering offering an incentive to make the public put any US dollars they hold into the domestic financial market rather than send them abroad. The decision was thought to boost the country's foreign exchange reserves as well as provide enough dollar financing for various projects.

The South Korean won rose 0.4% against the dollar even as President Lee Jae Myung Monday said that South Korea's economy could fall into crisis if the government accepts current US demands in stalled trade talks without safeguards, according to a report by Reuters. South Korea and the US are negotiating a trade deal in which the US would lower President Donald Trump's tariffs on South Korean goods in exchange for $350 billion of investment from South Korea, among other measures.

The Thai baht fell 0.1% against the greenback after Thailand's central bank Friday intervened to contain the currency's rise, after it rose to its strongest level in four years. The Malaysian ringgit fell 0.1% against the dollar, while the Philippine peso traded steady. (Rati Chaphekar) 

India Rupee: Expected range for rupee - Sept 22

MUMBAI – Following are the expected support and resistance levels for the rupee on Monday, as forecast by leading banks and brokerages in an Informist poll: 

(Rati Chaphekar) 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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