INR: Indian rupee slips to record closing low
- By Reuters -
- Oct 21, 2024
The Indian rupee (INR) declined to its weakest closing level on record on Monday but avoided sharper losses as likely intervention by the Reserve Bank of India (RBI) blunted the pressure from weakness in regional peers and persistent dollar outflows.
The Indian rupee closed at 84.0725 against the U.S. dollar, a tad lower than its close at 84.0650 in the previous session.
Foreign banks were spotted bidding for dollars, likely on behalf of custodial clients, a trader at a private bank said.
But “pretty consistent” dollar offers from state-run banks helped limit weakness in the local currency, the trader said.
Foreign investors have pulled out more than $9 billion from local stocks so far this month on a net basis, surpassing the previous peak of $8.35 billion in March 2020.
Benchmark Indian equity indices ended the day slightly in the red and are down about 4% each over October so far.
Asian currencies were down between 0.1% to nearly 1% while the dollar index ticked up to 103.7.
The dollar index has risen nearly 3% in October, boosted by expectations of shallower rate cuts by the Federal Reserve alongside rising odds of a victory for Donald Trump in the upcoming U.S. presidential election.
“FX markets seem to be positioning for a Trump victory in next month’s U.S. presidential election,” ING Bank said in a note.
Investors await remarks from Federal Reserve policymakers later in the day for cues on the future path of policy rates.
Dollar-rupee forward premiums rose with the 1-year implied yield rising 5 basis points to 2.24% after RBI chief Shaktikanta Das’s comments prompted traders to reassess the likelihood of a December rate cut.