Still, the rupee has fared better than most of its regional peers, largely on the back of frequent interventions by the Reserve Bank of India.
Column chart showing Asian currencies’ performance against the US dollar over November so far
In addition to its dollar-selling interventions across the spot, futures and non-deliverable forward market, the RBI has also asked banks to lower their speculative bets against the currency and has increased its scrutiny of lenders’ forex activity.
Traders expect the RBI to continue with its firm defence of the currency and only allow gradual depreciation.
Emerging market currencies may stay on tenterhooks heading into the inauguration of the incoming Trump administration in January as investors await clarity on its policies, especially surrounding trade tariffs.
“We believe the Indian rupee and IGB (Indian government bonds) would be the most resilient assets in Asia under the Trump presidency,” analysts at Societe Generale said in a note.
On the day, Asian currencies were mostly stronger benefiting from softness in the dollar, but the rupee was unable to gain in the face of dollar demand from foreign banks, traders said.
Source from Reuters: https://www.reuters.com/markets/currencies/rupee-logs-worst-month-since-march-trump-win-lifts-dollar-outflows-persist-2024-11-29/