Rupee Falls as H-1B Visa Fee Hike Hits IT Stocks
Rupee Slips as Visa Fee Hike Hits IT Stocks, Markets Close Lower
MUMBAI – The Indian rupee closed weaker on Monday, ending at 88.30 against the U.S. dollar, down 0.2 percent. Equity markets also felt the heat, with both the BSE Sensex and Nifty 50 dropping 0.5 percent each.
IT stocks led the decline, plunging nearly 3 percent, after U.S. President Donald Trump imposed a $100,000 fee on new H-1B visa applications. The steep cost is seen as a major blow to India’s tech sector, which relies heavily on the American market.
“India stands out as the key country that could be disproportionately affected by these visa changes,” MUFG noted, adding that the rupee is now likely to underperform compared with other Asian and G10 currencies.
The rupee has already lost about 3 percent this year, in contrast to gains of 3–6 percent seen in the Chinese yuan and Korean won. Traders on Monday pointed to strong dollar demand from foreign and private banks as added pressure on the currency, even though the greenback slipped against major peers.
The dollar index was last down 0.2 percent at 97.47, with investors awaiting a series of speeches from Federal Reserve officials this week for clues on the U.S. interest rate outlook. Markets currently see a 92 percent chance of a Fed rate cut in October, according to CME’s FedWatch tool.
Meanwhile, trade ties between Washington and New Delhi may be headed for a reset. Trump said his administration is working to resolve trade barriers with India and signaled plans to speak with Prime Minister Narendra Modi in the coming weeks. He expressed optimism that the two countries could reach a trade deal after recent diplomatic strains.
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