India’s rupee weakened, retreating from near the strongest level since May, on speculation local importers will boost dollar purchases to settle month-end bills. The currency is still up 4.2 percent for this month, a performance second only to South Korea’s won among Asia’s 10 most-used currencies, and there is speculation the Reserve Bank of India may combat gains to help protect exporters’ earnings. The central bank may say this week that the nation’s quarterly current-account deficit held near a record as imports picked up, according to economists surveyed by Bloomberg. “Dollar demand from importers is expected to increase as we approach the end of the month and that will cap rupee gains for now,” said Roy Paul, deputy general manager at Federal Bank Ltd. in Mumbai. “The RBI may intervene to protect exporters since the rupee has already rallied quite a bit.” The rupee declined 0.3 percent to 45.1438 per dollar as of 10:03 a.m. in Mumbai, according to data compiled by Bloomberg. The currency touched 44.995 yesterday, its strongest level since May 13. It may trade between 45.00 and 45.30 this week, Paul predicted. Offshore forwards indicate the rupee will trade at 45.74 to the dollar in three months, compared with expectations of 45.68 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. Annual growth in India’s overseas sales slowed to 13.2 percent in July from 30.4 percent the previous month, government data show. Import growth accelerated to 34.3 percent from 23 percent. To contact the editor responsible for this story: Anil Varma at avarma3@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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