The Indian debt segment has seen record foreign money outflows so far. Foreign portfolio investors (FPIs) have sold $8.4 billion in the debt segment as of October 15 – the highest in any calendar year for data available since 2002.
The worst run of rupee losses in 16 years is set to extend. Only this time, the declines might not be triggered by oil but by the surprise move by India’s central bank to hold rates despite the currency’s free fall.
India’s battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found.
The rupee gained on Wednesday, recovering from a record low hit at the end of the previous session, as gains in other Asian peers and stronger domestic shares helped sentiment, while the announcement of the first open market bond purchase for October aided bonds.
Prime Minister Narendra Modi’s government is considering tapping Indians living overseas to lure foreign exchange flows and prop up a sagging rupee, according to people with knowledge of the matter.
The Indian rupee slipped to a new low of 74.27 to a US dollar during the mid-afternoon session on Tuesday. Around 1.25 p.m., the Indian rupee traded at 74.27 to a dollar -- the lowest ever against the greenback.
