NEW DELHI: Indian rupee on Thursday closed near to a record low against the US dollar, which was recorded at at 84.0750 per dollar, nearly unchanged from its Wednesday close of 84.0775. Due to a public holiday, the Indian currency market will be closed on Friday.
The rupee briefly touched an all-time low of 84.0950 on Friday. Over the course of October, it declined by 0.3% and fluctuated between 83.79 and 84.0950.
The Reserve Bank of India (RBI) has actively intervened to temper the rupee’s depreciation, helping it perform better than other major Asian currencies in the lead-up to the November 5 US presidential election.
Over the past two weeks, the RBI has frequently sold dollars to moderate the rupee’s decline.
If Republican candidate Donald Trump wins, it could potentially drive up the dollar index, raise US Treasury yields, and impact other markets.
The RBI’s actions “could lead to complacency and major debacle in the event of any global turmoil or a black swan event,” said Jayram Krishnamurthy, co-founder of Almus Risk Consulting.
The rupee has also faced pressure this month from continuous foreign outflows from Indian equities, driven by relatively high valuations and China’s new stimulus measures.
In October, foreign investors pulled out nearly $11 billion on a net basis from Indian stocks, marking a significant reversal from the $7 billion in net inflows seen in September.
( With input from agency)