On October 15, 2024, the Indian rupee hit a record low of 84.0725 against the U.S. dollar, surpassing its previous low of 84.07 hit on Friday.
Indian twenty rupee currency notes are displayed at a roadside currency exchange stall in New Delhi, India, May 24, 2024. The Indian rupee dropped to an all-time low on Monday, weighed down by persistent dollar demand from foreign banks, likely for their custodial clients.
The rupee had previously managed to hold steady near the 84 mark for over two months, largely due to regular interventions by the Reserve Bank of India (RBI). The rupee’s weakness is compounded by significant foreign investor outflows, totaling around $8 billion in just ten days, and broader weakness in Asian currencies amid concerns over Chinese economic stimulus.
Asian currencies were mostly lower by 0.1% to 0.3% while the dollar index was at 103, hovering close to its two-month peak. Local private and state-run banks were actively offering dollars, while large foreign banks led the demand, indicating strong dollar bids. A trader noted that the dollar-rupee pair is likely to trade within the 83.95-84.20 range in the near term, with a sell-on-uptick strategy recommended if it moves quickly.
Amit Pabari, managing director at CR Forex, mentioned that the Reserve Bank of India’s efforts to defend the rupee, along with a potential easing of equity outflows, could provide some support for the currency. Traders are also monitoring Brent crude oil prices, which, despite recent dips to $78 per barrel, have increased nearly 9% in October due to concerns about Middle East conflicts impacting supply.
