Rupee Hits Record Low Against Dollar; Gold Surges Past ₹1.18 Lakh
The Indian rupee fell 47 paise to an all-time low of 88.75 against the US dollar, driven by foreign fund outflows following a steep hike in US H-1B visa fees expected to impact India's IT exports. This currency depreciation, combined with strong global demand for safe-haven assets, caused gold prices to surge by ₹2,700 to a new peak of ₹1,18,900 per 10 grams in the national capital. Silver prices also skyrocketed to an all-time high.
Unpacked:
The US raised H-1B visa fees to curb immigration costs and fund border enforcement, targeting large users like Indian IT firms. Higher fees increase costs for Indian companies sending employees to the US, making their services less competitive and potentially reducing IT export revenues.
A record-low rupee increases import costs—especially for essentials like oil—raising inflation and reducing consumer purchasing power. While it can boost export competitiveness, persistent depreciation risks destabilizing economic growth and complicating monetary and fiscal policy.
Foreign fund outflows mean investors are selling Indian assets and converting proceeds to foreign currency, increasing demand for the dollar and reducing demand for the rupee. This weakens the rupee’s value against the dollar, especially during periods of global uncertainty or unfavorable domestic policies.
When the rupee weakens, imported gold and silver become more expensive in rupees. Global demand for safe-haven assets rises during uncertainty, driving prices up further. This dual effect causes domestic gold and silver prices to surge to record highs.