Indian Rupee Declines to Set Fresh Record Low as Capital Outflows Persist
The Indian rupee fell to a new low on foreign outflows from the nation’s equities, as a delay in a trade deal with the US dents investor sentiment.
The currency fell 0.3% to 91.2275 per dollar on Wednesday, breaching its previous record low set in December. It weakened for a sixth straight day and underperformed all Asian peers.
“The rupee is getting hit by global uncertainties due to geopolitical developments, in addition to idiosyncratic issues like the US trade deal and capital outflows,” said Madhavi Arora , lead economist at Emkay Global Financial Services Ltd.
Foreign investors have pulled $2.7 billion from Indian equities this month , after about $19 billion of outflows last year. A delay in finalizing a trade deal with the US is also hurting sentiment. A steep 50% tariff on Indian goods has hit exporters, while strong imports have kept dollar demand high, adding to the pressure on the rupee.
In recent sessions, the Reserve Bank of India has intervened through dollar sales in the currency market to support the rupee, according to people familiar with the transactions.
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