Mumbai: The rupee remained range-bound in early trading on Monday, slipping 5 paise to 88.21 against the US dollar. The decline was driven by the strength of the dollar in global markets and a weak trend in domestic equities, which weighed on investor sentiment.
Forex traders noted that the recent increase in H-1B visa fees to USD 100,000 per year could impact the IT sector. Companies may face margin pressure and lower remittances due to a potential slowdown in employee deployments to the US.
In the interbank foreign exchange market, the rupee opened at 88.20 before losing ground to 88.21, down 5 paise from Friday’s close of 88.16.
Commenting on the visa fee hike, CR Forex Advisors MD Amit Pabari said that beyond sector-specific effects, India’s overall services exports could suffer if overseas deployments are reduced, potentially affecting the country’s external balances.
“This policy shift is likely to weigh on investor sentiment, trigger equity outflows from the Indian IT sector in the near term, and may also put pressure on the rupee,” Pabari added.
Meanwhile, the dollar index, which measures the greenback against a basket of six major currencies, rose 0.13% to 97.77. Brent crude, the global oil benchmark, traded 0.66% higher at USD 67.12 per barrel in futures markets.
Prime Minister Narendra Modi stated on Sunday that GST reforms, effective Monday, are expected to accelerate India’s growth, boost the “Aatmanirbhar Bharat” initiative, and support the country’s domestic products.
On the domestic equity front, the Sensex opened lower by 475.16 points at 82,151.07, while the Nifty slipped 88.95 points to 25,238.10. Foreign Institutional Investors (FIIs) were net buyers, acquiring equities worth Rs 390.74 crore on Friday.
India’s forex reserves rose by USD 4.698 billion to USD 702.966 billion for the week ending September 12, according to the Reserve Bank of India. In the previous week, reserves had increased by USD 4.038 billion to USD 698.268 billion.
In international developments, Commerce and Industry Minister Piyush Goyal will lead an official delegation to the US for trade talks starting September 22. The delegation, including Special Secretary Rajesh Agrawal and other officials, will engage with US counterparts to advance discussions aimed at concluding a mutually beneficial trade agreement.
