Rupee Hits Record Low of 84.39, RBI Steps In to Limit Losses

The Indian rupee fell to a record low of 84.39 against the US dollar on Monday.

This was due to concerns about Donald Trump's election win and ongoing selling by foreign portfolio investors (FPIs).

The rupee closed at 84.39 in the inter-bank forex market, slightly weaker than Friday's 84.38.

The Reserve Bank of India (RBI) is thought to have intervened to stabilize the forex market, helping to limit the rupee's fall.

While the full extent of the RBI's actions is unclear, they have offered some support for the rupee compared to other emerging market currencies.

The overall strength of the dollar is also shown by a rise in the Dollar Index (DXY), which measures the dollar against six major currencies.

On Monday, the DXY increased by 0.56% to 105.58, and it has risen over 4.20% this year.

Another factor affecting the rupee is the ongoing selling by FPIs in the Indian stock market.

On Monday, FPIs sold shares worth ₹2,306 crore. So far in November, their total sales have reached nearly $2.80 billion, following a significant sell-off of $11.19 billion in October.

Experts think the pressure on the rupee may decrease if FPI selling slows down.

There are indications that the rate of FPI sales is slowing, which could relieve some pressure on the currency.

Traders are closely watching upcoming inflation data from both the US and India, as it may influence currency movements.

Analysts predict that the rupee will remain weak in the short term, but they believe the RBI's measures will provide some support.

The RBI has been selling dollars through government banks to help the rupee.

The specific size of this intervention is unclear, but it has allowed the rupee to perform better than other emerging market currencies.

Despite this, the approach has led to a drop in India’s foreign exchange reserves.