Business | Markets
Indian rupee slips as global concerns rise
India's rupee weakened as global stock losses reignited concerns foreign funds will shun risk and dump their local holdings amid a deepening economic slump.
- Bloomberg
- Published: 23:51 January 15, 2009
Mumbai: India's rupee weakened as global stock losses reignited concerns foreign funds will shun risk and dump their local holdings amid a deepening economic slump.
The currency fell for the third time in four days after reports showed Japanese machinery orders and US retail sales dropped at more than double the pace economists forecast.
India's benchmark share index slumped to the lowest in more than a month, with overseas investors selling more shares than they bought for a fourth day. The MSCI Asia Pacific Index of regional shares dropped 3.8 per cent.
"The rupee is under pressure to weaken because global stock markets are showing a negative trend," said Amit Garg, a trader at state-owned Allahabad Bank in Mumbai. "Local stocks too are expected to decline," raising the odds of capital outflows.
The rupee declined 0.4 per cent to 49.0225 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. The currency dropped as low as 49.25 earlier.
Implied volatility on one-month dollar-rupee options fell yesterday to 16 per cent, the lowest since September, Bloomberg data showed.
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