The Indian rupee fell to a record low on Monday, impacted by concerns over Donald Trump’s U.S. election victory, which has kept Asian currencies under pressure, alongside ongoing outflows from Indian stocks weighing on the local currency.
Traders noted that likely intervention by the Reserve Bank of India (RBI) helped prevent a sharper decline.
The rupee touched a low of 84.3875 in early trading, surpassing its previous all-time low of 84.38 reached on Friday, and was trading at 84.37 as of 09:40 a.m. IST.
Most Asian currencies weakened by 0.1% to 0.4%, while the dollar index remained steady at 105, close to a four-month high reached last week after Trump’s win.
While the rupee faced pressure throughout last week, repeated RBI interventions helped it avoid steep drops, traders reported.
State-run banks were observed selling dollars on Monday, likely on behalf of the RBI, according to four traders.
The RBI’s interventions have contributed to a decline in India’s foreign exchange reserves, which dropped for the fifth straight week to a two-month low of $682.13 billion as of November 1.
Overseas investors have withdrawn a net of about $2.5 billion from Indian stocks in November so far, adding to October’s $11 billion in outflows.
Benchmark Indian equity indices, the BSE Sensex (.BSESN) and the Nifty 50 (.NSEI), dipped slightly on Monday after marking their fifth weekly decline in the past six weeks.
“The rupee is likely to remain under pressure unless we see a softening of the dollar index or a slowdown in FII (foreign institutional investor) outflows,” said Amit Pabari, managing director at FX advisory firm CR Forex.
