The Indian rupee reached a new all-time low this month, dropping to 88.49 against the US dollar on September 23, 2025, according to data from Morningstar. This is the second significant decline of the rupee this month, from 88.45 to 88.49.

The currency steadily declined throughout the month as robust US economic data, US visa fee hike, and persistent foreign fund outflows pressured emerging market currencies.

Anindya Banerjee, Head of Currency & Commodity Research, Kotak Securities, said, "USDINR touched a fresh all-time high, driven by concerns around potential H1B visa rule changes and ongoing trade war tensions. The RBI has allowed the market greater freedom in price discovery, as a weaker currency can act as a cushion in the midst of trade frictions. Meanwhile, there are very early signs of tightening dollar liquidity in global markets — a factor that warrants close monitoring."

The recent hike in U.S. visa fees, particularly the $100,000 fee for new H-1B visa applications, is expected to impact Indian tech and outsourcing firms that rely heavily on U.S. work visas, further dampening investor sentiment and foreign exchange inflows.

Amit Pabari, MD and CEO of CR Forex Advisors, "The move raised concerns about remittances and possible equity outflows from India’s IT sector — a double setback that the currency could poorly withstand at a time when foreign inflows have already been weak this year."

On the other hand, equity markets showed a nervous mood, with investors withdrawing ₹2,910 crore yesterday. The outflow highlights how global policy shocks can swiftly impact India’s financial markets, keeping the rupee’s value unstable.

While India faces outflows, the U.S. dollar itself isn’t exactly standing tall. It hovered near last week’s levels around 96.97, even after the Federal Reserve began its rate-cut cycle. Markets are finding little clarity, as Fed officials sent mixed messages on Monday.

"Attention now shifts to the U.S. PMI (Purchasing Managers’ Index), a key indicator of business activity in both the manufacturing and services sectors, which is due later today. Both Manufacturing and Services PMI readings are expected to be weaker, indicating softer momentum in the economy," said Pabari.

Analysts say a stronger surprise would signal resilience and support the dollar. However, if the data disappoints as expected, it could heighten concerns about slowing growth, leading the dollar to fall towards 96.50 and providing emerging market currencies like the rupee some breathing space.

The 88.40–88.60 zone is identified as a crucial resistance level, which should ideally hold and remain unbroken. With the dollar index weakening, the rupee is anticipated to appreciate from current levels, with support around 87.90–88,” said Pabari.