Rupee Slips to Low of 88.72 Against Dollar as Asian Currencies Weaken

The Indian rupee touched a new record low of 88.72 per U.S. dollar in afternoon trade on Monday, September 23, as weakness across Asian currencies and steady dollar demand dragged the local unit lower.

The currency opened at 88.41 per dollar, compared with its previous close of 88.31, and quickly slipped to its weakest-ever level. Dealers said the rupee’s decline was largely influenced by regional trends, as several Asian peers were also under pressure.

Asian Peers Extend Losses

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Bloomberg data showed that most major Asian currencies lost ground. The South Korean won slipped 0.22%, the Thai baht fell 0.16%, and the Indonesian rupiah dropped 0.08%. Meanwhile, the Singapore dollar, Japanese yen and Hong Kong dollar each weakened by 0.05%.

Analysts explained that the rupee was simply mirroring this broad regional weakness, though domestic policy concerns added an extra layer of pressure on the Indian currency.

Policy and Trade Headwinds

Experts pointed out that recent developments on the trade and policy front have created additional stress for the rupee. Higher U.S. tariffs on Indian exports and the steep increase in H1B visa fees—reportedly as high as $100,000—have raised concerns about reduced remittances and possible equity outflows from India’s IT industry.

The IT sector, which plays a crucial role in attracting foreign earnings, may face a “double blow” from both weaker remittances and a risk of lower global demand. At the same time, foreign inflows into Indian markets have already been sluggish this year, leaving the rupee more exposed to external shocks.

Outlook Remains Cautious

Despite the rupee’s record fall, some experts believe the currency could find short-term stability. Amit Pabari, Managing Director of CR Forex Advisors, noted that with the dollar index showing signs of softening, the rupee could bounce back modestly. “Support for the rupee is expected around 87.90–88.00, which could open space for some appreciation,” he said.

Traders, however, warned that near-term volatility is likely to persist, with global trade tensions, policy risks, and fund flow trends set to dictate the currency’s movement in the coming weeks.

Conclusion

The decline of the rupee to 88.72 versus the dollar demonstrates the combined effect of both internal and international causes. India's policy difficulties and trade threats exacerbated the decline, even if the weakening of its Asian peers increased immediate pressure. The recent softening of the dollar, according to analysts, may offer short-term respite, but a longer-term rebound for the rupee will mostly rely on more foreign inflows and a reduction in worries about international trade.