MUMBAI, Aug 5 (Reuters) - The Indian rupee declined to an all-time low on Monday as concerns about a sharp slowdown in the United States likely spurred outflows from local equities amid a global stocks sell-off.
The rupee declined to a record low of 83.82 against the U.S. dollar and was last quoted at 83.8125 as of 11:20 a.m. IST, down about 0.1% from its close at 83.75 on Friday.
The benchmark Indian equity indices, the BSE Sensex and Nifty 50, were both down about 3% each.
Asian equities were lower across the board after a bleak U.S. jobs report on Friday, which included an unexpected rise in the unemployment rate for July, kindled fears of economic growth.
Investors piled out of risky assets on fears that the Federal Reserve's delay in lowering interest rates, amid its protracted fight against inflation, may have tipped the United States into a recession.
On the day, the Reserve Bank of India's intervention helped limit the rupee's losses, traders said.
State-run banks "were intermittently selling (dollars)," likely on behalf of the RBI, to support the local currency, a foreign exchange trader at a mid-sized foreign bank said.
The dollar index was down 0.3% at 102.85, while most Asian currencies were up by 0.3% to 2.2%.
U.S. bond yields dropped sharply, with the 10-year Treasury yield down 8 basis points (bps) in Asia trading at 3.71%, its lowest since July 2023, amid rising expectations that the Fed will now aggressively lower rates.
"The markets are becoming concerned that a cyclical slowdown could be around the corner. We are not joining the herd in pricing in 75-100 bps in rate cuts (over the rest of 2024); 50 bps would be adequate," DBS Bank said in a note. (Reporting by Jaspreet Kalra; Editing by Savio D'Souza)
