Aug. 4 (Bloomberg) -- India’s rupee halted a four-day advance on speculation oil refiners stepped up dollar purchases to meet the increased cost of crude imports. Oil prices in New York touched a three-month high yesterday, and have gained almost 7 percent in the past week. India imports almost three-quarters of the oil it uses. The South Asian nation’s overseas purchases of the commodity averaged $8.4 billion in the second quarter, up from $5 billion in the year-earlier period, according to government data. “The rupee has been pulled lower today by some large dollar outflows, mainly related to oil imports,” said Vikas Babu, a foreign-exchange trader at state-owned Andhra Bank in Mumbai. “Crude has risen to $82, and that is boosting dollar demand.” The rupee was little changed at 46.165 per dollar as of the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. The currency fell as low as 46.315 earlier. Offshore forward contracts indicated the rupee will trade at 46.79 to the dollar in three months, compared with expectations yesterday for a level of 46.75. Forwards are agreements to buy or sell assets at a set price and date. Non deliverable contracts are settled in dollars. The rupee pared the day’s losses as gains in the Bombay Stock Exchange’s Sensitive Index spurred speculation overseas investors will raise holdings of local equities from a record. The index advanced 0.6 percent today, boosting the week’s gain to 2 percent. Foreign ownership of shares climbed to $83.5 billion on July 30, gaining 15 percent this year, according to data released yesterday by the Securities & Exchange Board of India. Investors added $3.8 billion last month, the most since March. --Editors: Ven Ram, Linus Chua. To contact the reporter on this story: Anil Varma in Mumbai at avarma3@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

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