Rupee loses 2 paise to hit lowest-ever closing level of 88.75 against US dollar

Mumbai, Sep 24 (PTI) The rupee ended 2 paise down at its lowest-ever closing level of 88.75 against the US dollar on Wednesday, weakening for the third consecutive day amid severe shock waves in the aftermath of America's sweeping tariff move against Indian exports followed by the steep hike in H-1B visa fee.

Forex traders said rupee was hovering near its all-time low level on unabated withdrawal of foreign funds as investors remained concerned over global trade uncertainties and impact of US visa fee hike on India's IT services exports.

At the interbank foreign exchange, the rupee opened at 88.80 against the US dollar, and touched the high of 88.67 during the session. The unit finally settled for the day with a loss of 2 paise at 88.75, its lowest-ever closing level so far.

On Tuesday, the rupee depreciated 45 paise to close at its record low of 88.73 against the greenback. It had also touched an all-time intraday low of 88.82 against the US dollar.

"We expect the rupee to remain weak on US visa fee hike issue. Weakness in the domestic market and FII outflows may further pressurise the rupee.

"However, weakness in crude oil prices may support rupee at lower levels. Any intervention by the RBI may also support the rupee. Traders may take cues from new home sale data from the US. USD-INR spot price is expected to trade in a range of 88.40 to 89.25," said Anuj Choudhary, Research Analyst, Currency and commodities, Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.36 per cent higher at 97.61.

Brent crude, the global oil benchmark, was trading 0.61 per cent higher at USD 68.04 per barrel in futures trade.

On the domestic equity market front, Sensex dropped 386.47 points to settle at 81,715.63, while the Nifty declined 112.60 points to 25,056.90.

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. PTI DRR HVA