Time to remit? Indian Rupee slips to new record low against UAE dirham

While the US election may have a "sizeable impact on equities, the RBI is likely to keep rupee volatility in check," a trader with a large private bank said

By Reuters

Published: Mon 4 Nov 2024, 11:58 AM

The Indian rupee declined to its weakest level on record on Monday as persistent outflows from local stocks continued to pressure the currency even as most of its Asian peers benefited from a weak US dollar.

The rupee slipped to its all-time low of 84.11 (Dh22.91) against the dollar, inching past its previous record low of 84.0950 (Dh22.9141) hit last week.

The benchmark BSE Sensex and Nifty 50 equity indexes were down about 1.5 per cent each on the day, pressured by likely selling by overseas investors and caution ahead of the US presidential election outcome.

Advertising

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

Persistent selling by overseas investors and a tepid local earnings season have weighed on local stocks, with the benchmarks down about 9 per cent from the record high hit in late September.

Foreign investors have net sold over $11 billion of Indian equities in October, while overseas investors and foreign lenders also trimmed their positions in government bonds last month for the first time since April.

Foreign banks were spotted bidding for dollars on Monday, likely on behalf of custodial clients, traders said.

Despite the slide in equities, the Reserve Bank of India's routine interventions have ensured that the rupee doesn't suffer as much, and the central bank is expected to persist with its defence of the currency, traders said.

Asian currencies were mostly higher on the day. The dollar index dipped 0.2 per cent to 103.7, likely pressured by the unwinding of long positions in the lead-up to the US presidential election results.

While the US election may have a "sizeable impact on equities, the RBI is likely to keep rupee volatility in check," a trader with a large private bank said.

ALSO READ: