Indian rupee hits new all-time low against UAE dirham

Likely intervention by the Reserve Bank of India helped the currency limit its losses, with traders citing strong dollar offers from state-run banks

By Reuters

Published: Thu 21 Nov 2024, 9:54 AM

The Indian rupee weakened to its all-time low on Thursday, pressured by likely foreign outflows from local stocks and renewed strength in the dollar as investors tempered hopes of aggressive rate cuts by the US Federal Reserve.

The rupee declined to a low of 23.0047 against the UAE dirham (84.4275 against the US dollar) in early trading, eclipsing its previous all-time low of 23.0027. It was quoted at 23.0020 as of 9am UAE time, nearly flat on the day.

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Likely intervention by the Reserve Bank of India helped the currency limit its losses, with traders citing strong dollar offers from state-run banks.

Benchmark Indian equity indexes, the BSE Sensex, opens new tab and Nifty 50, opens new tab were down about 0.7 per cent each.

Indian equities were pressured by sharp declines in the shares of Adani Group's listed entities after its billionaire chairman was indicted in New York over his involvement in an alleged multibillion-dollar bribery and fraud scheme.

Shares of the group's listed entities were down across the board, with the flagship firm Adani Enterprises, opens new tab slumping 20 per cent and Adani Green, opens new tab shedding 18 per cent.

Meanwhile, the dollar's recovery on Wednesday following a three-day losing streak also kept the rupee on the defensive.

The dollar index was at 106.5 after rising 0.4 per cent on Wednesday, while the rupee's Asian peers were mostly rangebound.

Cautious remarks from Fed officials dented expectations of aggressive rate cuts.

Fed Governor Michelle Bowman on Wednesday expressed discomfort with the central bank cutting interest rates while inflation continues to run above its target.

Odds of a December rate cut by the Fed have declined to 52 per cent from 82 per cent a week earlier, according to CME's FedWatch tool.

Heightened geopolitical risks triggered by the Ukraine-Russia conflict also supported the greenback.

"Markets need to monitor the dangerous escalation in the Ukraine-Russia war, now driven by increased military engagements from both sides, strategic policy shifts, and heightened international involvement," DBS Bank said in a note.

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