Rupee slips to fresh all-time low of 88.76 against the US dollar

Surge in crude prices, H1-B visa fee hike and global uncertainties weigh on India’s currency, even as RBI intervention keeps a sharp fall in check.

Mumbai: The rupee moved in a tight range and slipped 1 paisa to close at a lifetime low of 88.76 against the American currency on Thursday amid a strong US dollar and weak domestic markets.

Forex traders said the H1-B visa fee hike and surge in crude oil prices also pressured the rupee. Investors remained concerned over global trade uncertainties and the impact of the US visa fee hike on India's IT services exports.

However, the selling of greenbacks by exporters and reports of intervention by the RBI prevented a sharp fall in the domestic unit, they added.

At the interbank foreign exchange, the rupee opened at 88.65 against the US dollar, and witnessed an intraday high of 88.60 and a low of 88.76 against the greenback.

The domestic unit finally settled at a fresh low of 88.76, registering a fall of just 1 paisa over its previous close.

On Wednesday, the rupee ended 2 paise down at 88.75 against the US dollar.

"...with the RBI intervening around 88.70 levels, the rupee was unable to cross the level, which indicates that the apex bank is preferring a measured depreciation and market participants are watching the central bank's moves before its meeting on October 1. Amid global uncertainties, geopolitical tensions, tariffs applied on India and Visa fees tension, the rupee showed a small resilience..." 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 0.07 per cent lower at 97.80.

Brent crude, the global oil benchmark, was trading 0.39 per cent lower at USD 69.04 per barrel in futures trade.

"We expect the rupee to remain weak on recovery in the US Dollar and risk aversion in global markets amid geopolitical tensions between Russia and Ukraine," said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

"US visa fee hike issue and rising crude oil prices may further pressurise the rupee. However, the selling of Dollars by exporters may support the rupee at lower levels. Traders may take cues from the final Q2 GDP, weekly unemployment claims, and durable goods orders data from the US. USD/INR spot price is expected to trade in a range of 88.40 to 89.10," Choudhary added.

On the domestic equity market front, Sensex tumbled 555.95 points to settle at 81,159.68, while the Nifty fell 166.05 points to 24,890.85.

Foreign Institutional Investors offloaded equities worth Rs 2,425.75 crore on Wednesday, according to exchange data.

Meanwhile, Commerce and Industry Minister Piyush Goyal is in the US for trade talks. He is accompanied by senior officials of the ministry, including special secretary and India's chief negotiator Rajesh Agrawal.

Goyal has held discussions with his US counterpart.

This visit comes in the backdrop of recently concluded day-long discussions in New Delhi between US Chief Negotiator Brendan Lynch and Agrawal on the proposed bilateral trade agreement.