Rupee declines, avoids record low on cenbank intervention
By Jaspreet Kalra
MUMBAI, Nov 28 (Reuters) -The Indian rupee weakened on Thursday to close just shy of its all-time low, pressured by foreign portfolio outflows and month-end importer demand for dollars, while intervention by the central bank helped limit losses.
The rupee INR=IN closed at 84.4850 against the U.S. dollar, down from its close of 84.4525 in the previous session.
The currency had weakened to its all-time low of 84.5075 last week.
Benchmark Indian equity indexes, the BSE Sensex .BSESN and Nifty 50 .NSEI, closed down by about 1.5% each, dragged down by losses in stocks of heavyweight IT firms.
Foreign banks were spotted bidding for dollars while state-run banks were present on offer "pretty much through the session", most likely on behalf of the Reserve Bank of India, a trader at a foreign bank said.
The central bank has frequently intervened in recent sessions to support the rupee near the psychologically important support level of 84.50.
The dollar index rose about to 106.3 after slumping 0.7% on Wednesday, its largest single-day fall since late-August.
A stronger euro following hawkish comments from a European Central Bank policymaker and month-end rebalancing flows likely weighed on the dollar, ING Bank said in a note.
Elevated US interest rates, European political developments and "the threat of more tariff social media posts coming through should keep the dollar bid on dips," the note said.
Meanwhile, investors have added to short positions on most emerging Asian currencies, including the rupee, amid concerns about the incoming U.S. administration's policies, according to a Reuters poll.
Focus now turns to the India gross domestic product (GDP)data for the July-September quarterdue on Friday, which will help investors gauge the extent of the economic slowdown that contributed to foreign outflows from local equities.
Reporting by Jaspreet Kalra; Editing by Janane Venkatraman
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