Indian rupee weakens to record low, hurt by sustained outflows from equities
Updates to add details, graphic and analyst comment
MUMBAI, Oct 18 (Reuters) -The Indian rupee slipped to an all-time low on Friday, weighed down by persistent outflows from local equities while mild dollar sales from state-run banks, likely on behalf of the Reserve Bank of India, curbed sharp losses.
The rupee INR=IN declined to a record low of 84.0775 against the U.S. dollar, inching past its previous lifetime low of 84.0750 hit on Monday.
Dollar bids from foreign banks, likely related to outflows from local stocks, pressured the rupee on Friday while state-run banks were spotted offering dollars, traders said.
The rupee slipped below the 84 handle for the first time last week but interventions by the Reserve Bank of India have helped avert sharp declines despite hefty foreign outflows.
Overseas investors have sold $8.4 billion of Indian stocks on a net basis so far in October, a reversal from the more than $8 billion of inflows last month. This month's outflows are on track to be the highest since at least 2002.
Equity assets under custody of foreign portfolio investors had crossed $1 trillion as of end-September.
Benchmark Indian equity indices, the BSE Sensex .BSESN and Nifty 50 .NSEI were down about 0.2% each on the day, on course for their third weekly decline on the trot.
The rupee is likely to see "slow and steady depreciation", with the central bank expected to strongly protect against a decline below 84.20 in the near-term, Dilip Parmar, a foreign exchange research analyst at HDFC Securities, said.
Asian currencies were mostly up between 0.1% to 0.4% while the dollar index was a tad lower at 103.6 after touching an 11-week high on Thursday.
Indian equities saw large outflows in October https://reut.rs/3Y536Wm
Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala
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