Mumbai: India's rupee dropped to a five-week low as concern a global economic recovery will be delayed spurred risk aversion among overseas funds.
The rupee fell for a second day after the World Bank said the global economy will shrink 2.9 per cent this year, worse than a previous forecast for a 1.7 per cent contraction.
"Investors are still pessimistic about world economic recovery," said Sanjay Arya, treasurer at state-owned Bank of Maharashtra in Mumbai.
"We only have to observe the pace at which Indian stocks and the currency decline."
The rupee dropped 0.5 per cent to 48.84 per dollar in Mumbai, according to data compiled by Bloomberg. It earlier touched 48.885, the weakest since May 15. Arya forecasts it will reach 49 this week.
Offshore forwards contracts indicate traders predict the rupee will fall to 48.95 in a month
