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The rupee declined to a new all-time low after data showed a sharp slowdown in the economic growth. Bonds extended gains on bets the central bank may cut interest rates sooner than anticipated.
The rupee fell 0.2 per cent to 84.6637 per dollar after a government report on Friday showed the economy grew at the slowest pace in almost two years.
A stronger dollar spurred by US President-elect Donald Trump demanding a commitment from the so-called BRICS nations to using the greenback also weighed on emerging-market assets.
“The meaningful miss in GDP for India increases the chance that RBI will intervene less aggressively and allow USD/INR to move higher over time in an orderly fashion,” said Michael Wan, senior currency analyst at MUFG Bank.
India’s five-year bond yield tumbled nearly six basis points to 6.62 per cent as traders continued to bet on easing measures by the Reserve Bank of India, which is due to announce its rate decision on December 6.
More stories like this are available on bloomberg.com
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