Rupee Hits Record Low: 88.53 vs US Dollar

Mumbai, Sep 23 (PTI) The rupee depreciated 25 paise to an all-time intraday low of 88.53 against the US dollar in early trade on Tuesday, as headwinds like enhanced US tariffs on Indian goods, as well as the US H-1B Visa fee hike, dented investor sentiments.

Forex traders said that global risk aversion and trade policy uncertainty have also exacerbated the rupee's depreciation.

At the interbank foreign exchange, the rupee opened at 88.41, then lost further ground and touched an intraday low of 88.53 against the US dollar, registering a decline of 25 paise over its previous close.

On Monday, the rupee depreciated by 12 paise to close at 88.28 against the US dollar.

Forex traders said the rupee is dwindling towards record low levels as market participants are analysing the likely repercussions of the US's new USD 100,000 H-1B visa levy, which could precipitate a slowdown in remittance growth and curtail service exports to the US.

Moreover, risk aversion in domestic markets may also pressure the rupee, they said.

"The RBI has been the only dollar provider with some small inflows on account of IPOs of Rs 7,500 crore being launched this week, but getting absorbed by the large buying of dollars.

"The RBI, however, has limited direct currency intervention, thus allowing greater volatility and possible further declines in the rupee, which has made new lows against most currencies," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent lower at 97.30.

Brent crude, the global oil benchmark, was trading 0.62 per cent lower at USD 66.16 per barrel in futures trade.

On the domestic equity market front, the Sensex fell 207.78 points or 0.25 per cent to 81,952.19 in morning trade, while the Nifty was down 68.40 points or 0.27 per cent to 25,133.95.

Meanwhile, Foreign Institutional Investors offloaded equities worth Rs 2,910.09 crore on Monday, according to exchange data.

Meanwhile, Commerce and Industry Minister Piyush Goyal is leading an official delegation to the US for trade talks.

The delegation plans to hold talks with the US team to take forward discussions with a view to achieving an early conclusion of a mutually beneficial trade agreement.

The minister will visit New York, accompanied by the special secretary in the ministry, Rajesh Agrawal, and other officials.