MUMBAI: The Indian rupee slipped to an all-time low on Monday, weighed down by a fall in most Asian peers and strong dollar demand from foreign banks.
The rupee, which weakened below the key support level of 84 for the first time on Friday, ended unchanged at 84.06 on Monday after dipping to a record low of 84.0750 earlier in the session.
Foreign banks’ dollar bids, likely on behalf of custodian clients, weighed on the currency alongside weakness in most regional peers, traders said.
Overseas investors have been sellers of Indian stocks over the last 10 trading sessions, selling nearly $8 billion.
Benchmark Indian equity indices, the BSE Sensex and Nifty 50, rose on the day but have declined about 3% this month.
Asian currencies were mostly lower, with the offshore Chinese yuan down 0.3% to 7.08 per dollar as investors considered the economic implications of the fiscal measures announced over the weekend.
The dollar index was little changed at 103, close to its highest level in two months.
“The dollar is holding recent gains as investors now price in less than 50bp of Federal Reserve rate cuts this year. We doubt short-dated US rates will move much higher from here,” ING Bank said in a note.
Investors awaited India’s retail inflation data due later in the day.
The consumer price index based inflation likely overshot the central bank’s 4% medium-term target in September and accelerated to 5.04% from 3.65% in August, according to a Reuters poll of economists.
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