October 11, 2024 07:08 GMT
INR: USD/INR Hits Fresh Record High Amid Rising Equity Outflows, Dovish RBI
INR
USD/INR has finally breached 84.00 following ongoing RBI intervention over the past ~2 months to protect further rupee downside beyond this level.
- Rising crude prices and Middle East tensions have underpinned the rally in USD/INR from the September lows, while the RBI rate decision earlier this week – which is seen to have opened the door to the start of rate cuts later in the year – will have added to the pressure on the local currency.
- In addition, foreign outflows from local stocks and bonds have worsened the near-term outlook - Indian equities saw outflows of -$438m yesterday, with outflows over the past 5 sessions totalling -$5.04bn. Meanwhile, data compiled by Bloomberg shows bonds have seen $125m of outflows this month.
- According to a VP at a local bank who spoke to Bloomberg, “There were interventions at 83.98 and 83.99 levels today as well but the outflows from assets have been very strong, especially from equities.”
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