More Stories

Informist, Tuesday, Sept. 23, 2025

By Rati Chaphekar

MUMBAI – The rupee ended at a record closing low against the dollar Tuesday as weak risk sentiment owing to the hefty hike in US H-1B visa fee prompted banks to persistently buy dollars for importers and foreign portfolio investors, dealers said. While the Reserve Bank of India stepped in to sell dollars at multiple dollar/rupee levels to limit the losses for the Indian unit, the intervention was not aggressive in nature, they said. 

"I think the impact of the H-1B visa news was seen fully (on the rupee) today. There is just panic buying (of dollars) in the market all over," a dealer at a state-owned bank said. "RBI also did not stand much in the way of this."

After hitting a lifetime low of 88.7975 a dollar during the day, the rupee ended at 88.7550 on Tuesday, against 88.3075 Monday. With a depreciation of 0.5% against the dollar, the Indian unit posted its biggest one-day fall in over three weeks. 

Other Asian currencies fell 0.1-0.5% against the dollar, with the Indian rupee being the worst hit. The domestic currency opened lower against the dollar as investors' risk appetite took a beating due to the sharp hike in the fee by the US for new H-1B visas. The US has imposed a $100,000 fee for new H-1B visas, mandatory for companies that want to hire workers under the H-1B visa programme. Market participants expect the changes to weigh on the growth of India's services exports and reduce remittances to the country.

The hike in H-1B visa fees comes at a time when the US has imposed an additional 25% punitive tariff on Indian goods, in addition to a 25% reciprocal tariff. Following this, traders have grown more uncertain about a breakthrough in the India-US trade deal. Commerce Minister Piyush Goyal is currently visiting the US to hold negotiations on the proposed bilateral trade agreement. "The sentiment around the trade deal has been a roller coaster of sorts. It has been changing constantly. I think it is bleak for now, and that is reflecting in the rupee," a dealer at a foreign bank said. 

Shortly after opening, the rupee fell below its key technical support of 88.50 a dollar. The sharp fall in the rupee led to aggressive dollar demand by importers who feared a further decline in the local unit, dealers said. 

The risk aversion led FPIs to pull out funds from domestic equities, which also exerted downward pressure on the Indian unit, dealers said. "This downturn (in the rupee) is attributed to a persistent bearish bet by the traders, which is being driven by external worries and a continued outflow of foreign funds. Despite strong domestic high-frequency data, these external pressures are exerting downward force on the local currency," Dilip Parmar, currency analyst at HDFC Securities, said.

The continuous dollar buying led to stop-losses on short dollar bets being triggered around multiple dollar/rupee levels, which further exacerbated the decline in the Indian unit, according to dealers.

Meanwhile, state-owned banks sold dollars, likely on behalf of the central bank, at multiple dollar/rupee levels during the day, which limited losses in the Indian unit, according to dealers. However, the intervention was not aggressive in nature and the RBI did not seem to be protecting a particular level, they said. 

"They (RBI) are intermittently selling (dollars) but not changing the direction of the rupee. There is no point holding the rupee at a level," a dealer at a private-sector bank said. Some banks also sold dollars on behalf of exporters, noting the relatively higher dollar/rupee levels, which also aided the Indian unit, dealers said.

FORWARDS

Near-tenure dollar/rupee forward premiums ended sharply higher as banks bought dollars for forward delivery, noting an arbitrage between the onshore forwards and offshore non-deliverable forwards rates, dealers said. 

Banks executed sell/buy swaps--sell for immediate delivery and buy for delivery later--in the onshore forwards market, noting a rise in premiums in the offshore NDF market, dealers said. At 1530 IST, the one-month exact period dollar/rupee forward premium was 1.98%, against the previous close of 1.86%. On an absolute basis, the premium was 15.37 paise against 13.69 paise Monday. 

Meanwhile, the one-year dollar/rupee forward premium ended steady as market participants awaited US Federal Reserve Chair Jerome Powell's speech and multiple US economic data later in the day for further cues on the Federal Reserve's rate-cut trajectory. The US Flash Manufacturing purchasing managers' index and Services PMI for September are slated for release Tuesday. Forwards of a currency pair reflect the interest rate differential between two countries.

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.34%, unchanged against the previous close. On an absolute basis, the premium was 207.42 paise against 206.32 paise Monday. 

OUTLOOK

On Wednesday, the rupee will take cues from movement in the dollar index after US Federal Reserve Chair Jerome Powell's speech and multiple US economic data later in the day, dealers said. The Indian unit will also take cues from movement in other Asian currencies, they said.

Market participants will keenly watch developments in the India-US trade talks. "The rupee will mostly recover tomorrow (Wednesday) and will stay range-bound more or less, unless anything comes up from (Commerce Minister) Goyal's US visit," a dealer at a state-owned bank said. Risk aversion among investors may continue to spur FPI outflows from domestic markets, which may weigh on the Indian unit, according to dealers.

Dealers expect importers to buy dollars, as they are wary of a further fall in the rupee. However, should the rupee inch towards the psychologically-crucial 89.00 a dollar, dealers expect the RBI to step in through dollar sales to slow the pace of the rupee's depreciation. "I think if the RBI continues to relent, 89.00-90.00 is not too far for the rupee," the dealer at a foreign bank said. 

On Wednesday, the rupee is expected to move within a range of 88.50 to 89.00 against the dollar, with immediate technical support for the rupee pegged at 88.80 per dollar. 

India Rupee - World FX: Dollar index steady before Powell speech; euro flat

India Rupee - World FX: Dollar index steady before Powell speech; euro flat

MUMBAI – The dollar index was steady ahead of US Federal Reserve Chair Jerome Powell's speech and multiple US economic data later in the day. The US September Flash Manufacturing purchasing managers' index and US September Flash Services PMI data are due later in the day.

At 1500 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.27, against 97.30 Monday and 97.65 Friday. The index fell to 97.20 in early trade. 

The euro was also flat against the dollar even as data released Tuesday showed Euro zone business activity grew at its fastest pace in 16 months in September. The HCOB Flash Eurozone Composite PMI, compiled by S&P Global, edged up to 51.2 in September from 51.0 in August, marking the ninth consecutive month of growth. A Reuters poll had predicted a 51.1 reading.

However, French economic activity contracted in September at the sharpest rate since April, data Tuesday showed. The HCOB Flash France Composite PMI Output Index fell to 48.4 in September from 49.8 in August, marking a five-month low. A reading below 50 indicates a contraction. The pound sterling and Japanese yen also traded steady against the greenback.

The Australian dollar fell 0.2% against the greenback after data Tuesday showed Australia's S&P Global composite PMI fell to 52.1 in September, from 55.5 in August, marking the lowest reading in three months. The services PMI showed a modest slowdown to 52.0 in September, from 55.8 in August. The New Zealand dollar, too, fell 0.3% against the greenback. 

The Swiss franc fell 0.1% against the dollar. The Swiss National Bank is expected to hold its policy rate steady at zero on Thursday and throughout 2026 due to the country's inflation remaining on target and currency being stable, according to economists polled by Reuters.  (Rati Chaphekar) 

India Rupee: Near-term forward premiums jump on onshore-offshore arbitrage

India Rupee: Near-term forward premiums jump on onshore-offshore arbitrage

NEW DELHI – Near-tenure dollar/rupee forward premiums rose sharply as banks bought dollars for forward delivery, noting an arbitrage between the onshore forwards and offshore non-deliverable forwards rates, dealers said. "Mainly the paying is in near tenures as offshore points are higher. The far tenures seem to be quiet," a dealer at a foreign bank said.

Banks executed sell/buy swaps--sell for immediate delivery and buy for delivery later--in the onshore forwards market, noting a rise in premiums in the offshore NDF market, dealers said. At 1345 IST, the one-month exact period dollar/rupee forward premium was 1.98%, against the previous close of 1.86%. On an absolute basis, the premium was 15.37 paise against 13.69 paise Monday. 

Meanwhile, the one-year dollar/rupee forward premium was largely steady as market participants are waiting for US Federal Reserve Chair Jerome Powell's speech and multiple US economic data later in the day, for further cues on the Federal Reserve's rate-cut trajectory. The US Flash Manufacturing purchasing managers' index and Services PMI for September are slated for release Tuesday. Forwards of a currency pair are reflective of the interest rate differential between two countries.

Comments by several Fed officials on Monday suggested a more cautious approach to the Fed's rate cutting cycle. St. Louis Fed President Alberto Musalem said the central bank "should tread cautiously", as its policy rate accounting for inflation might already be close to neutral. Atlanta Fed President Raphael Bostic said the focus needed to remain on ensuring inflation returns to the Fed's 2% target from a current level about a percentage point higher and that further rates cuts this year were not needed.

At 1345 IST, the one-year exact period dollar/rupee forward premium was 2.33%, against the previous close of 2.34%. On an absolute basis, the premium was 207.17 paise against 206.32 paise Monday.  (Pratiksha)

India Rupee: Hits record low as importers, FPIs buy dollars; RBI limits fall

MUMBAI – The rupee fell to a lifetime low against the dollar Tuesday as banks aggressively bought dollars on behalf of importers and foreign portfolio investors, dealers said. The Indian unit fell to a record low of 88.7600 a dollar.

The rupee came under pressure as risk appetite of investors was dampened by the hefty hike in fee by the US for new H-1B visas. "It is all panic buying (by importers) today. No one knows if there will be any change in this (H-1B visa fee hike) mandate," a dealer at a private-sector bank said. "If the new H-1B visa fees continue as it is, it will be huge blow to Indian information technology industries." The new changes are also expected to weigh on remittances and thus, dollar inflows into India.

The US has imposed a $100,000 fee for new H-1B visas, mandatory for companies if they want to hire workers under the H-1B visa programme. The new measure has also cast a shadow on market participants' outlook of a trade deal between India and the US, negotiations for which are still underway, weighing on the local unit, dealers said. The US has slapped an additional 25% punitive tariff on Indian goods, on top of a 25% reciprocal tariff, citing New Delhi's continued purchases of Russian crude oil.

Owing to the weak risk appetite, banks persistently bought dollars on behalf of foreign portfolio investors, looking to pull out funds from domestic equities, which pushed the Indian unit downwards, dealers said. Noting the sharp fall in the Indian currency, importers also bought the greenback fearing that the rupee may depreciate further, they said.

However, state-owned banks stepped in to sell dollars at multiple dollar/rupee levels, likely on behalf of the Reserve Bank of India, which limited the fall of the Indian currency, dealers said. "I don't think there is any level being targetted (by the RBI). They are just making the fall (of the rupee) gradual and ensuring it is not sudden," a dealer at a state-owned bank said.  

During the day, the rupee is seen moving in a range of 88.40 and 88.90 against the greenback. Dealers peg immediate technical support for the rupee at 88.80 a dollar. (Rati Chaphekar)

India Rupee: Technical levels for rupee - Sept 23

MUMBAI – At 1130 IST, the rupee was at 88.6975 per dollar. At 0900 IST, the rupee was at 88.4100 a dollar, against its previous close of 88.3075. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Rati Chaphekar and Pratiksha)

India Rupee: Hits record low as risk appetite hit on US H-1B visa fee hike

MUMBAI – The rupee fell to a record low against the dollar Tuesday due to dampened risk sentiment among investors after a hefty hike in the fee for new H-1B visas by the US and US tariff-related uncertianty, dealers said. The Indian currency hit a record low of 88.5575 a dollar shortly after opening. However, some state-owned banks' dollar sales likely on behalf of the Reserve Bank of India, limited losses for the Indian unit, dealers said. 

Investors' risk appetite took a beating after US President Donald Trump Friday announed a $100,000 fee for new H-1B visas per year, mandatory for companies if they want to hire workers under the H-1B visa programme. While 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, the new rule could cap opportunities for Indian workers in the US. Market participants expect the move to weigh on India's information technology services sector and reduce remittances. 

Following the H-1B visa fee hike news, traders have grown more uncertian about a breakthrough in India-US trade negotiations around Washington's tariffs on New Delhi, which also weighed on the Indian unit, they said. "There are only buyers (of dollars) in market right now. Unless RBI wants to protect it (rupee) heavily, I don't think there is any stopping for rupee," a dealer at a state-owned bank said. Trade Minister Piyush Goyal is on a visit to the US from Monday to take forward the negotiations on the proposed bilateral trade agreement.

During the day, the rupee is seen moving in a range of 88.30 and 88.70 against the greenback. Dealers peg immediate technical support for the rupee at 88.60 a dollar. (Rati Chaphekar and Pratiksha)

India Rupee - Asia FX: Mixed ahead of Powell's speech; Thai baht down 0.2%

MUMBAI – Asian currencices traded on a mixed note against the dollar Tuesday as investors await US Fed Chair Jerome Powell's speech and multiple US economic data later in the day, for further cues on the Federal Reserve's rate-cut trajectory. The US September Flash Manufacturing purchasing managers' index and US September Flash Services PMI data is slated to be released Tuesday. 

The dollar index remained weak as investors assessed mixed comments by Fed officials on the path of interest rates in the world's largest economy. At IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 97.38, against 97.30 Monday and 97.65 Friday. The index fell to 97.20 in early trade. 

The Thai baht fell 0.2% against the dollar after Thailand Finance Minister Ekniti Nitithanprapas Monday said the country's new government was setting up a multi-agency team to counter the baht's rise to four-year highs, which is a risk for the key economic drivers of tourism and exports. The government also wanted to urgently tackle high debt levels, he said. 

The Indonesian rupiah traded steady against the greenback. Data released Tuesday showed the country recorded a $19.38-billion budget deficit in Jan-Aug, equivalent to 1.35% of GDP. The total revenue fell 7.8% from the same period in 2024, while total spending rose 1.5% from a year earlier.

The South Korean won fell 0.3% against the dollar, while the Philippine peso rose 0.1%. Both the Malaysian ringgit and the Chinese yuan traded flat.(Rati Chaphekar)

India Rupee: Expected range for rupee - Sept 23

MUMBAI – Following are the expected support and resistance levels for the rupee on Tuesday, 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 Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.