New Delhi: India's rupee weakened for the third time in four days on speculation the nation's refiners will step up dollar purchases to pay for costlier crude-oil imports.
The currency extended its retreat from the strongest level in a month after the cost of crude reached a two-year high last week.
India's oil imports rose to a five-month high of $8.4 billion (Dh30.85 billion) in October, according to the latest government data. The rupee also declined on speculation the central bank will sell the currency to curb exchange-rate volatility after gains in each of the last two weeks.
"Domestic factors such as month-end dollar demand from importers and the RBI's dollar purchases on dips will counter rupee-bullish factors," J. Moses Harding, a Mumbai-based executive vice president at IndusInd Bank, wrote in a research note yesterday.
The Indian currency slid 0.2 per cent to 45.155 per dollar as of 10:09 am in Mumbai, according to data compiled by Bloomberg. The currency is still up 1.6 per cent this month and touched 44.39 on December 7, the strongest level since November 12.
The price of crude oil in New York increased 0.2 per cent to $87.99 a barrel. It exceeded $90 last week for the first time since October 2008.
Offshore forwards indicate the rupee will trade at 45.80 to the dollar in three months, compared with expectations of 45.69 on December 10. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
