Indian rupee drops to new record low against UAE dirham

The currency dipped to a low of 84.3875 (Dh22.9938) in early trading, eclipsing its previous all-time low of 84.38 (Dh22.99) hit on Friday

By Reuters

Published: Mon 11 Nov 2024, 10:25 AM

Last updated: Mon 11 Nov 2024, 10:41 AM

The Indian rupee weakened to its lowest level on record on Monday, as worries about Donald Trump's victory in the US election kept Asian currencies under pressure while sustained outflows from Indian stocks weighed on the local currency.

Likely intervention by the Reserve Bank of India (RBI), though, helped the currency stave off a sharper decline, traders said.

The rupee dipped to a low of 84.3875 (Dh22.9938) in early trading, eclipsing its previous all-time low of 84.38 (Dh22.99) hit on Friday. The currency quoted at 84.37 (Dh22.98) as of 09.40am IST.

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Asian currencies were mostly weaker between 0.1 per cent to 0.4 per cent while the dollar index was little changed at 105, hovering close to a four-month high hit last week in the wake of the Trump win.

While the rupee remained under pressure for much of last week, repeated interventions by the RBI have ensured that the currency doesn't suffer sharp declines, traders said.

State-run banks were spotted offering dollars on Monday as well, most likely on behalf of the RBI, four traders said.

Interventions by the RBI have contributed to a decline in India's foreign exchange reserves, which fell for the fifth consecutive week to an over 2-month low of $682.13 billion as of November 1.

Overseas investors have pulled out a net of about $2.5 billion from Indian stocks over November so far, adding to the $11 billion of outflows in October.

Benchmark Indian equity indices, the BSE Sensex and the Nifty 50, were slightly down on Monday after logging their fifth weekly fall in the last six weeks.

"The rupee is likely to remain under pressure unless there is a softening in the dollar index or a slowdown in FII (foreign institutional investor) outflows," Amit Pabari, managing director at FX advisory firm CR Forex, said.

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