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Indian rupee declines as early election trends spur dollar buying

Early trends showed Prime Minister Narendra Modi's alliance is leading, but the tally could fall short of what exit polls predicted

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Photo: File

By Reuters

Published: Tue 4 Jun 2024, 9:59 AM

Last updated: Tue 4 Jun 2024, 10:03 AM

The Indian rupee declined on Tuesday, as early trends in election results spurred broad-based dollar demand amid a lack of clarity about the performance of Indian Prime Minister Narendra Modi-led alliance.

The rupee was at 22.713 against the UAE dirham as of 8.25am local time, down from 22.654 in the previous session. The rupee touched an intra-day low of 22.735 in early trading.

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Early trends showed Prime Minister Narendra Modi's alliance is leading, but the tally could fall short of what exit polls predicted, a foreign exchange salesperson at a private bank said.

Indian equity indices, the BSE Sensex and Nifty 50, fell nearly 3 per cent amid nervousness about the election outcome while bond yields climbed.

It is "evident that markets are not too happy in the context of what the exit polls had indicated. You can see it across equities, bonds and FX markets," Kunal Kurani, associate vice president at Mecklai Financial, said.

The rupee's struggles were in contrast to moves in Asian peers, which advanced after weaker-than-expected US manufacturing data spurred a drop in Treasury yields.

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Reuters

Published: Tue 4 Jun 2024, 9:59 AM

Last updated: Tue 4 Jun 2024, 10:03 AM

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