Indian rupee slips from two-month high

Mumbai: India's rupee fell, retreating from near a two-month high, on speculation oil importers were taking advantage of recent appreciation and lower crude prices to boost purchases.

The rupee rallied in each of the last five weeks, its best winning streak in two months, as overseas investors pumped funds into Indian stocks to profit from accelerating growth in Asia's third-largest economy. Foreigners' net purchases totalled $2.2 billion (Dh8 billion) in the first 11 days of this month and $464 million in February, exchange data show.

Dollar weakness

"The combination of recent dollar weakness and a drop in oil prices presents a timely opportunity to importers and that is pressuring the local currency," said Vikas Babu, a Mumbai-based foreign-exchange trader at state-owned Andhra Bank. "I expect this trend to persist and the rupee to weaken in the near term."

The rupee dropped 0.3 per cent to 45.59 per dollar as of 9.53am in Mumbai, according to data compiled by Bloomberg. It's still up 1.1 per cent this month and last week touched 45.34, the strongest level since January 11.

The cost of crude oil in New York fell 0.5 per cent to $80.81 a barrel, headed for the lowest close in more than a week. India, home to about 1.2 billion people, imports some three-quarters of the oil it needs.