Rupee hits record low of 88.75 against USD, Pg15.

Key Highlights:

• The Indian Rupee hit a record low of 88.75 against the US Dollar on Tuesday.
• The rupee's decline is attributed to concerns over the US administration's decision to increase H-1B visa fees.
• Outflow by foreign portfolio investors also contributed to the rupee's fall.
• The domestic currency slipped 44 paise, closing at 88.75, compared to the previous close of 88.31.

Detailed Insights:

• The US President's announcement involves raising the H-1B visa application fee from $1,000 to $1,00,000 per applicant, impacting new applications.
• Analysts predict that the increased H-1B visa fees will likely slow down remittance growth and reduce service exports to the US.
• The Reserve Bank appears to be allowing the market to determine prices more freely, influenced by external worries and continuous outflow of foreign funds.
• Trade tensions and concerns over potential changes to H1B visas are weighing on market sentiment, contributing to the rupee's depreciation.

Key Concepts Involved:

• H-1B Visa: A non-immigrant visa that allows US employers to temporarily employ foreign workers in specialty occupations.
• Foreign Portfolio Investors (FPI): Investors that invest in the financial assets of a country.
• Remittance: Money sent by a migrant to their family in their home country.