India’s rupee closed near a one-week high on speculation some exporters took advantage of the currency’s recent losses to convert overseas earnings. A decline in the rupee, which weakened versus the dollar in four of the last five weeks, boosts the local-currency value of companies’ income from abroad. Gains in the nation’s benchmark stock index for a second day fueled speculation foreign funds will resume purchases of local equities, buoying the rupee. “The rupee is not able to form a firm weakening trend, which is prompting exporters to convert some of their overseas receivables,” said Amit Garg, a currency trader at state-owned Allahabad Bank in Mumbai. “There appear no reasons why the currency should weaken from here on” as stocks gain. The rupee was little changed at 48.935 per dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. It gained 0.7 percent yesterday, the most in two weeks. Local exporters including Infosys Technologies Ltd., India’s second-biggest computer-services provider, and Dr. Reddy’s Laboratories Ltd., the nation’s second-biggest drugmaker, reported better-than-expected profits last quarter as the rupee weakened 3.8 percent in the three months. The currency tumbled 19.2 percent in 2008, the most in 17 years, reaching an all-time low of 50.615 on Dec. 2. Stocks Rise The Bombay Stock Exchange Sensitive Index climbed 2.8 percent, adding to yesterday’s 3.8 percent advance. Data from the Securities and Exchange Board of India showed overseas investors sold Indian equities worth $1.06 billion than they bought this month. Non-deliverable forward contracts showed traders reduced bets for further weakness in the rupee. Offshore contracts indicate the rupee may trade at 49.01 to the dollar in a month, compared with expectations for 49.34 a week ago. 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.

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