BLBG:India’s Rupee Declines Most in a Week as Importers Buy Dollars
India’s rupee fell the most in a week on speculation local companies stepped up dollar purchases to buy raw materials, taking advantage of a recent decline in commodity prices.
The currency has weakened 1.2 percent this month as the UBS Bloomberg Constant Maturity Commodity Index retreated more than 9 percent from a record intraday high on April 11. Crude oil prices in New York dropped 12.8 percent this month.
“Commodities have fallen back from recent highs and so it’s a good time for importers to book shipments,” said Krishnamurthy Harihar, Mumbai-based treasurer at the Indian unit of FirstRand Bank Ltd. “Dollar demand from gold and oil buyers is going to keep some moderate downward pressure on the rupee.”
The Indian currency dropped 0.2 percent to 44.7975 per dollar as of 10:36 a.m. in Mumbai, according to data compiled by Bloomberg. The rupee has weakened 0.4 percent this quarter, the worst performance among Asia’s 10 most-traded currencies.
Offshore forwards indicate the rupee will trade at 45.50 to the dollar in three months, compared with expectations of 45.39 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporters 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.
