June 12 (Bloomberg) -- India’s rupee was set for its worst week since March on concern crude oil prices near an eight-month high will boost import costs. The currency has retreated 1.6 percent since touching a seven-month high on June 3 as a 62 percent rally in the commodity in New York this year threatened to widen the nation’s trade deficit. Asia’s third-largest economy depends on imports to meet about 75 percent of its annual energy requirement. “The rally in oil prices could have some short-term negative impact on the rupee,” said Puneet Sharma, chief currency trader at state-owned Allahabad Bank in Mumbai. “Oil- related dollar buying is expected pick up.” The rupee dropped 0.8 percent to 47.525 per dollar as of 10:28 a.m. in Mumbai, according to data compiled by Bloomberg. It is the second-worst performer this month among the 10 most- traded Asian currencies outside Japan, with a 0.9 percent loss. Offshore contracts indicate bets the rupee will trade at 47.68 to the dollar in a month, compared with expectations for a rate of 47.20 at the end of last week. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency. India’s oil imports averaged $4 billion from January through April, compared with $8.5 billion in the year-ago period. The nation’s trade deficit, the amount by which overseas purchases exceed sales, widened to $5 billion in April from $4.05 billion the previous month, according to government data.

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