MUMBAI, Oct 18 - The Indian rupee has reached an unprecedented low of 84.0775 against the U.S. dollar, surpassing its previous record of 84.0750 set earlier this week. This decline is attributed to ongoing outflows from local equities, despite mild dollar sales by state-run banks, likely acting on behalf of the Reserve Bank of India.
In October, foreign investors have sold $8.4 billion in Indian stocks, marking a significant reversal from over $8 billion in inflows recorded the previous month. This trend suggests the current outflows could be the highest since at least 2002.
The benchmark Indian equity indices, BSE Sensex and Nifty 50, both experienced a decrease of approximately 0.2% on the day, indicating a potential third consecutive weekly decline. Analysts predict a gradual depreciation of the rupee, with expectations that the central bank will intervene to prevent a drop below 84.20 in the near term.
As of the end of September, foreign portfolio investors held equity assets valued over $1 trillion. In the broader Asian market, currencies were mostly up between 0.1% to 0.4%, while the dollar index slightly decreased to 103.6 after reaching an 11-week high the previous day.