The Indian rupee approached a record low, pressured by a stronger US dollar as traders pared bets on a December rate cut by the Federal Reserve, and as the local central bank was not seen stepping in to support the currency.
The rupee weakened as much as 0.6%, the most since Aug. 29, to 88.7437 per dollar on Thursday, closing in on its September record of 88.8050. Earlier this month, the Reserve Bank of India was alarmed to see the rupee nearing that level and sold dollars to stabilise it, said a person familiar with the matter.
“Most Asian currencies have weakened after the Fed cast doubts on a December rate cut, but the rupee has taken a bigger beating in the absence of strong central bank dollar sales in the spot market today,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.