Rupee ends October near record low; cenbank quells volatility
Updates with closing levels, adds analyst comments
MUMBAI, Oct 31 (Reuters) - The Indian rupee ended near an all-time low against the dollar on Thursday amid outflows from equities and anxiety over the outcome of the U.S. election, but the central bank's intervention kept the local currency in a narrow range through October.
The rupee INR=IN closed at 84.0750 against the U.S. dollar, nearly unchanged from its close of 84.0775 on Wednesday. Indian currency market will remain closed on Friday for a public holiday.
The currency briefly hit a record low of 84.0950 in Friday's session. In October, therupee fell 0.3% and moved in a range of 83.79 to 84.0950.
The Reserve Bank of India's relentless intervention has limited therupee's fall and helped it outperform against major Asian peers ahead of the U.S. presidential election on Nov. 5.
The RBI sold dollars on almost all days in the last two weeks to ensure a measured depreciation of the rupee.
A win for Republican candidate Donald Trump could spark a rally in the dollar index USD=, lift U.S. Treasury yields and undermine Asian currencies .
The RBI is well-equipped to deal with a potential sudden outflow of foreign funds and any steep fall in the rupee if Trump wins the U.S. presidential election, Reuters reported.
The central bank's defence of the rupee could, however, leave importers and exporters complacent to rising risks in the global markets, analysts said.
The RBI'sactions "could leadto 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 was also pressured byrelentless foreign outflows from Indian equities this month amid relatively expensive valuations and China's stimulus plans.
Foreign investors have taken out nearly $11 billion on a net basis from Indian equities in October, a sharp U-turn from the $7 billion inflows in September.
Rupee https://reut.rs/3C5NbQx
Reporting by Nimesh Vora and Siddhi Nayak; Editing by Savio D'Souza and Eileen Soreng
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