India’s rupee dropped after global funds reduced holdings of the nation’s shares as inflation accelerated last month. Overseas investors sold $224 million more Indian shares than they bought in the first four days of last week, exchange data show. Wholesale prices rose 9.06 percent from a year earlier after increasing 8.66 percent in April, official data showed on June 14. “The outflows from the stocks is mainly driving the rupee,” said Naveen Raghuvanshi, a Mumbai-based currency trader at Development Credit Bank Ltd. “The concern on Europe’s debt crisis is definitely there, keeping the currency range-bound.” The rupee dropped 0.1 percent to 44.92 per dollar as of 9:30 a.m. in Mumbai, according to data compiled by Bloomberg. The currency will trade between 44.85 and 44.95 today, Raghuvanshi said. European governments failed to agree on releasing a loan payment to spare Greece from default, ramping up pressure on Prime Minister George Papandreou to first deliver budget cuts in the face of domestic opposition. Offshore forwards indicate the rupee will trade at 45.54 to the dollar in three months, compared with expectations of 45.48 at the end of last week. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. To contact the reporter responsible for this story: Khalid Qayum in Singapore at kqayum@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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