By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee hit its lowest closing level ever on Monday, closing at 84.0725 against the U.S. dollar, slightly down from the previous day’s 84.0650. The decline was limited by likely intervention from the Reserve Bank of India (RBI), which helped offset pressure from regional currency weaknesses and ongoing dollar outflows.
A trader noted that foreign banks were buying dollars, likely for their clients, but ongoing dollar offerings from state banks helped stabilize the rupee.
This month, foreign investors have sold over $9 billion in Indian stocks, surpassing the previous record of $8.35 billion in March 2020. As a result, Indian equity indices dropped by about 4% in October.
Asian currencies also fell by 0.1% to nearly 1%, while the dollar index increased to 103.7. This index has risen almost 3% this October, influenced by anticipated smaller rate cuts from the Federal Reserve and rising expectations of a Donald Trump victory in the upcoming U.S. presidential election.
Investors are looking for signals from Federal Reserve policymakers regarding future interest rates.
The forward premiums for the dollar-rupee increased, with the 1-year implied yield rising 5 basis points to 2.24%, following comments from RBI chief Shaktikanta Das about the potential for a December rate cut.
(Reported by Jaspreet Kalra; Edited by Mrigank Dhaniwala)
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