Time to remit? Indian rupee drops to new all-time low

Overseas investors have sold $8.4 billion of Indian stocks so far in October, a reversal from the $8-billion inflows last month

By Reuters

Published: Fri 18 Oct 2024, 6:53 PM

The Indian rupee slipped to an all-time low on Friday, weighed down by persistent outflows from local equities while mild dollar sales from state-run banks — likely on behalf of the Reserve Bank of India (RBI) — curbed sharp losses.

The South Asian currency declined to a record low of 84.0775 against the US dollar (22.909 against UAE dirham), inching past its previous lifetime low of 84.0750 (22.9087) hit on Monday.

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Dollar bids from foreign banks, likely related to outflows from local stocks, pressured the Indian rupee on Friday while state-run banks were spotted offering dollars, traders said.

The rupee slipped below the 84 handle for the first time last week but interventions by the RBI have helped avert sharp declines despite hefty foreign outflows.

Overseas investors have sold $8.4 billion of Indian stocks so far in October, a reversal from the more than $8 billion of inflows last month. This month's outflows are on track to be the highest since at least 2002.

Equity assets under custody of foreign portfolio investors had crossed $1 trillion as on end-September.

The Indian rupee is likely to see "slow and steady depreciation", with the central bank expected to strongly protect against a decline below 84.20 in the near-term, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.

Asian currencies were mostly up between 0.1 per cent to 0.4 per cent while the dollar index was a tad lower at 103.6 after touching an 11-week high on Thursday.

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