Rupee flat as cenbank intervention helps offset equity outflows pressure
By Jaspreet Kalra
MUMBAI, Nov 8 (Reuters) -The Indian rupee was little changed near a record low on Friday, as likely intervention by the central bank countered the impact of outflows from local stocks.
The rupee INR=IN was at 84.37 as of 11:40 a.m. IST, just shy of its all-time low of 84.3775 hit in the previous session.
State-run banks were spotted offering dollars, most likely on behalf of the Reserve Bank of India, near 84.37-84.3750 levels, traders said.
While the dollar index has given up a large part of the gains spurred by Republican Donald Trump's U.S. election win, the rupee has not recouped losses because of persistent selling of local stocks.
Overseas investors have pulled out over $1.5 billion from the Indian equity market in November so far, on top of the $11 billion outflow in the previous month.
India's benchmark equity indexes, the BSE Sensex .BSESN and Nifty 50 .NSEI, were down 0.1% and 0.2%, respectively, on the day. The Nifty is down 8% from its record high hit late September.
The dollar index =USD dropped 0.7% on Thursday and was last quoted little changed at 104.4 in Asia hours while regional currencies were mixed.
The U.S. Federal Reserve delivered a widely expected rate cut on Thursday and signalled a cautious and patient approach to subsequent policy easing.
The offshore Chinese yuan CNH= was down 0.1% at 7.12 on Friday but has recovered after falling below 7.20 following Trump's victory.
"Given that there has been a recovery in the offshore Yuan, we may see the RBI intervene a bit more aggressively," FX advisory firm IFA global said in a note.
Meanwhile, dollar-rupee forward premiums declined, with the 1-year implied yield INRANPRM1Y=RR down 5 basis points at 2.17%, its lowest since mid-October, on broad-based receiving interest from exporters, foreign and state-run banks.
Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
