Indian Rupee Strengthens as Investors Shift to Anti-AI Trade

The Indian rupee strengthened on Friday, trading between 94.52 and 93.83, driven by a massive influx of foreign portfolio investment. Investors injected 13,750 crore rupees into Indian equities on Friday and nearly 15,000 crore rupees on Thursday, bringing total net investments for November to 45,960 crore rupees.

Financial analysts describe the surge as an anti-AI trade. Following US midterm elections that granted Democrats control of Congress, investors are diversifying away from concentrated AI-focused equities in East Asia and toward India. This shift is supplemented by exporter hedging and the triggering of stop losses.

While the Reserve Bank of India previously implemented support measures for the currency, including a special dollar window for government-owned oil importers, the central bank did not intervene to cap the recent appreciation.