Indian Rupee ends October 2024 near record low

The Indian rupee (INR) ended near an all-time low against the dollar on Thursday amid outflows from equities and anxiety over the outcome of the U.S. election, but the central bank’s intervention kept the local currency in a narrow range through October.

The Indian rupee closed at 84.0750 against the US Dollar (USD), nearly unchanged from its close of 84.0775 on Wednesday. Indian currency market will remain closed on Friday for a public holiday.

The currency briefly hit a record low of 84.0950 in Friday’s session. In October, the rupee fell 0.3% and moved in a range of 83.79 to 84.0950.

The Reserve Bank of India’s relentless intervention has limited the rupee’s fall and helped it outperform against major Asian peers ahead of the U.S. presidential election on Nov. 5.
The RBI sold dollars on almost all days in the last two weeks to ensure a measured depreciation of the rupee.

A win for Republican candidate Donald Trump could spark a rally in the dollar index , lift U.S. Treasury yields and undermine Asian currencies.
RupeeVols

The RBI is well-equipped to deal with a potential sudden outflow of foreign funds and any steep fall in the rupee if Trump wins the U.S. presidential election, Reuters reported.

The central bank’s defence of the Indian rupee could, however, leave importers and exporters complacent to rising risks in the global markets, analysts said.

The RBI’s actions “could lead to complacency and major debacle in the event of any global turmoil or a black swan event,” said Jayram Krishnamurthy, co-founder of Almus Risk Consulting.

The rupee was also pressured by relentless foreign outflows from Indian equities this month amid relatively expensive valuations and China’s stimulus plans.

Foreign investors have taken out nearly $11 billion on a net basis from Indian equities in October, a sharp U-turn from the $7 billion inflows in September.

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