By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee was unable to benefit from a rise in its Asian peers on Friday as likely outflows from local equities and a buoyant dollar pressured the currency, but dollar sales from state-run banks helped limit losses.
The rupee was at 84.07 against the U.S. dollar as of 10:15 a.m. IST, little changed from its previous close and just shy of its all-time low of 84.0750 hit on Monday.
Dollar bids from foreign banks, likely related to custodial outflows, and local oil companies pressured the rupee on Friday, a trader at a state-run bank said.
However, mild sales from state-run banks, likely on behalf of the Reserve Bank of India (RBI) helped the rupee hold above its all-time low, traders said.
Benchmark Indian equity indices, the BSE Sensex and Nifty 50, were down about 0.5% each on the day, adding to a three-session losing streak.
Foreign investors have sold $8.4 billion worth of local stocks in October on a net basis so far, on course for the highest monthly outflows since at least 2002. Assets under custody of foreign portfolio investors had crossed $1 trillion as of end-September.
Asian currencies were mostly stronger with the Philippine peso up 0.3% and leading gains.
Data released on Thursday showed U.S. retail sales increased 0.4% last month, compared to a 0.3% rise expected by economists, while jobless claims dipped, reinforcing bets that the Federal Reserve will cut rates by 25 bps, and not 50 bps, in November.
The data helped boost the dollar to an 11-week high of 103.87 on Thursday, also lifting U.S. bond yields.
The dollar index’s recovery “looks overstretched,” DBS Bank said in a note. With the rise in U.S. bond yield stalling near 4% this month, the dollar index should be lower around 102, the note said.
(Reporting by Jaspreet Kalra; Editing by Janane Venkatraman)
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