Rupee suffers worst week since December

Mumbai: India's rupee completed its worst week since December on concern Europe's debt crisis is eroding economic growth in developing nations.

A government report yesterday showed gains in India's factory output slowed to 1.8 per cent in December from 5.9 per cent the previous month, less than the 2.6 per cent median estimate in a survey.

"There are still concerns emanating from Greece which have impacted the rupee," said J. Moses Harding, executive vice president at IndusInd Bank Ltd. in Mumbai. "As long as European policy makers keep liquidity easy, India will attract flows as our fundamentals are relatively strong."

The rupee declined 1.5 per cent last week to 49.41 per dollar in Mumbai. That is the biggest drop since the five-day period to Dec-ember 9.

The currency advanced 0.2 per cent yesterday, reversing losses after dropping as much as 0.5 per cent earlier, on speculation the central bank sold dollars.

"The central bank wants the rupee to stay in a range and it seems like it will defend 50," said Roy Paul, general manager of treasury at Federal Bank Ltd.