MUMBAI: The rupee ended near an all-time low against the dollar on Thursday amid outflows from equities and anxiety over the outcome of the US election, but RBI‘s intervention kept the local currency in a narrow range through Oct.
The rupee closed at 84.08 against the US dollar, nearly unchanged from its close on Wednesday. Indian currency market will remain closed on Friday for a public holiday. The currency briefly hit a record low of 84.1 in Friday’s session. In Oct, the rupee fell 0.3% and moved in a range of 83.79 to 84.1. RBI’s relentless intervention has limited the rupee’s fall and helped it outperform against major Asian peers ahead of the US presidential election on Nov 5. RBI sold dollars on almost all days in the last two weeks to ensure a measured depreciation of the rupee. A win for Republican candidate Donald Trump could spark a rally in the dollar index, lift US Treasury yields and undermine Asian currencies.
RBI is well-equipped to deal with a potential sudden outflow of foreign funds and any steep fall in the rupee if Trump wins the US presidential election, Reuters reported. The central bank’s defence of the rupee could, however, leave importers and exporters complacent to rising risks in the global markets, analysts said.