India’s rupee dropped to the lowest in more than a week on speculation importers took advantage of the currency’s gains this month to buy cheaper foreign exchange.
The rupee fell a third day, extending yesterday’s biggest loss in six weeks. Some companies with overseas payments due before the end of the year probably stepped up dollar purchases, said Krishnamurthy Harihar, treasurer at Development Credit Bank Ltd. in Mumbai.
“The rupee is weaker because some latent dollar demand is now emerging,” Harihar said. “Importers who waited to cover near-term obligations as the rupee strengthened in recent weeks are now buying the dollars they need.”
The rupee declined as much as 1 percent to 48.48 per dollar, the lowest since Dec. 12, before trading at 48.445 as of 10:06 a.m. in Mumbai, according to data compiled by Bloomberg. It may touch 49 before Dec. 31, Harihar said.
The currency gained 2.7 percent last week, the most since the five-day period ended Nov. 7. The currency has slid 17.8 percent this year, set for its biggest annual loss since 1991.
The South Asian nation’s import costs have risen an average 37.2 percent this year, compared with 24.5 percent in 2007, government data show.
Source : Bloomberg.com