Indian Rupee at 28-Month Low as Global Selloff Spurs Outflowsby
Foreigners have sold a net $515 million of shares this month
RBI may curb volatility, slow pace of declines: Religare
India’s rupee plunged to the weakest level in more than two years as a global selloff spurs outflows from local equities.
Overseas investors sold $174 million more Indian shares than they bought this week through Jan. 13, the latest data compiled by Bloomberg show. Withdrawals last week, at $383 million, were the biggest since the five days ended Dec. 4. Emerging-market stocks and currencies retreated Thursday on speculation investors spooked by China-induced risk aversion and reported explosions in Indonesia are favoring cash.
“The global selloff is getting reflected in Indian stocks and that’s pulling the rupee down,” said Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, near New Delhi. “The Reserve Bank of India may intervene to curb rupee volatility and slow the pace of depreciation.”
The rupee weakened 0.7 percent to 67.2950 a dollar, the lowest since Sept. 4, 2013, in Mumbai, according to prices from local banks compiled by Bloomberg. The currency has declined 1.7 percent in January. The S&P BSE Sensex index of shares dropped 0.3 percent, taking its loss in 2016 to 5.2 percent
Sovereign bonds declined. The yield on the notes due May 2025 rose two basis points to 7.79 percent, the highest since Dec. 14, prices from the central bank’s trading system show.