By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee fell to a record low but managed to limit losses due to likely intervention from the Reserve Bank of India (RBI). On Monday, it closed at 84.0725 against the U.S. dollar, slightly down from 84.0650 the previous day.
Foreign banks were purchasing dollars, likely for clients, but state-run banks provided consistent dollar offers that helped stabilize the rupee. This month, foreign investors have withdrawn over $9 billion from Indian stocks, surpassing a previous record.
Indian stock indices ended the day lower, with a cumulative decline of about 4% in October. Meanwhile, Asian currencies dropped between 0.1% and nearly 1%, as the dollar index rose to 103.7, increasing nearly 3% this month due to expectations of slower rate cuts by the Federal Reserve and political factors ahead of the U.S. election.
Investors are waiting for comments from Federal Reserve officials regarding future interest rate policies. As a result of RBI comments, the 1-year dollar-rupee forward premiums increased, indicating a reassessment of potential rate cuts in December.
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)
