Rupee falls 12 paise to close at 88.28 against US dollar

Mumbai, Sep 22 (PTI) The rupee depreciated 12 paise to close at 88.28 against the US dollar on Monday, as investors weighed Trump's H-1B visa fee hike impact on Indian remittances amid heightened risk-averse sentiment.

Forex traders said the recent hike in H-1B visa fees could contribute to equity outflows from the Indian IT sector in the near term, and could also exert pressure on the Indian rupee.

At the interbank foreign exchange, the rupee opened at 88.20, then touched an intra-day low of 88.34 and a high of 88.12 against the greenback. The domestic unit finally settled at 88.28, lower by 12 paise over its previous close.

On Friday, the rupee appreciated four paise to close at 88.16 against the US dollar.

"The Indian rupee is dwindling towards a record low as market participants scrutinise the likely repercussions of the US's new USD 100,000 H-1B visa levy. This development could precipitate a slowdown in remittance growth and curtail service exports to the US," Dilip Parmar, Research Analyst, HDFC Securities, said.

Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan, said, "We expect the rupee to remain weak as the US visa fee hike may dent market sentiments, which may weigh on the domestic currency.

"Risk aversion in domestic markets may also pressure the rupee. However, overall weakness in crude oil prices may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 88.05 to 88.60." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 97.52.

Brent crude, the global oil benchmark, was trading 0.21 per cent lower at USD 66.54 per barrel in futures trade.

On the domestic equity market front, Sensex tanked 466.26 points to settle at 82,159.97, while Nifty dropped 124.70 points to 25,202.35.

Foreign institutional investors sold equities worth Rs 2,910.09 crore on a net basis on Monday, according to exchange data.

India's forex reserves jumped USD 4.698 billion to USD 702.966 billion for the week ended September 12, the Reserve Bank of India (RBI) said on Friday.

In the previous reporting week, the overall reserves had increased USD 4.038 billion to USD 698.268 billion.

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. PTI DRR TRB TRB