Market News

By Jaspreet Kalra

MUMBAI, Sept 22 (Reuters) - The Indian rupee weakened slightly on Monday, pressured by weakness in Indian IT stocks following the imposition of steep U.S. visa fees, which may threaten the firms' long-standing business models.
The rupee was at 88.16 as of 10:45 a.m. IST, down 0.1% from its close at 88.09 on Friday.

Indian IT stocks (.NIFTYIT) opens new tab were down 2.8% after the U.S. introduced a $100,000 fee for new H-1B visa applications post Indian market hours on Friday. Advertisement · Scroll to continue

Report This Ad The broader equity benchmark indexes, the BSE Sensex (.BSESN), opens new tab and Nifty 50 (.NSEI), opens new tab, slipped 0.2% and 0.1%, respectively. At a macro level, the change in visa policies could impact India's software service exports, professional and management consultancy services exports, and remittance inflows into the country, according to analysts at Citi.

"In the near-term, it remains to be seen whether these additional visa fees could become a hurdle in arriving at a trade deal," the analysts said in a note. India's Trade Minister Piyush Goyal is slated to visit Washington on Monday for trade talks, nearly a week after a U.S. delegation met trade officials in India. Advertisement · Scroll to continue Report This Ad Traders also pointed to broad-based dollar demand weighing on the rupee alongside a firmer dollar. 

Against a basket of peers, the dollar was last at 97.79, holding onto a four-day string of gains. A slew of speeches from U.S. Federal Reserve officials through the week will be closely watched for clues on the U.S. rate outlook after the central bank delivered a long-anticipated rate cut last week. Dollar-rupee far forward premiums eased slightly with the 1-year implied yield down 2 bps at 2.33%, retreating from a four-month high hit last week.

Reporting by Jaspreet Kalra; Editing by Eileen Soreng