India’s rupee fell to the lowest in almost two weeks as global stock losses added to speculation investors will pare holdings of riskier emerging-market assets. The currency dropped the most in almost a month yesterday as stock exchange data showed overseas funds last week sold Indian shares worth $482 million more than they bought, the most since the five-day period ended Nov. 21. The MSCI Asia Pacific Index declined 1.2 percent after Standard & Poor’s 500 Index lost 5.3 percent yesterday. “The rupee is expected to weaken because equities are showing a negative trend globally and we aren’t seeing much capital inflows,” said Roy Paul, assistant manager of treasury at Federal Bank Ltd. in Mumbai. “The currency market has been closely tracking the trend in stocks and that should continue.” The rupee fell 0.1 percent to 49.265 per dollar as of 9:37 a.m. in Mumbai, according to data compiled by Bloomberg. It slumped as low as 49.345 earlier, the lowest in intraday trading since Jan. 9. The currency may trade between 48.75 and 49.50 in the coming days, Paul said. The Bombay Stock Exchange’s Sensitive Index, or Sensex, has fallen 5.7 percent this month. Non-deliverable forward contracts showed traders increased bets for further weakness in the rupee. Offshore contracts indicate the rupee may trade at 49.47 to the dollar in a month, compared with expectations for 49.44 yesterday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.

Source