Rupee Declines on Concern Higher Oil Prices to Boost India's Import Bill.

India’s rupee weakened for a second day, extending its retreat from a five-month high, on speculation the nation’s refiners stepped up dollar purchases to pay for costlier crude-oil imports.

The currency declined the most in four weeks after the price of crude touched a two-month high of $82.38 per barrel yesterday. India’s petroleum imports averaged $8.3 billion a month so far this year, up from $5.4 billion in the year-earlier period, government data show.

“The rupee is pulling back from recent highs as importers find the levels attractive to buy the dollar,” said Roy Paul, deputy general manager at Federal Bank Ltd. in Mumbai.

The Indian currency appreciated 0.3 percent to 44.72 per dollar as of 10:06 a.m. in Mumbai, according to data compiled by Bloomberg. It rose as high as 44.235 yesterday, the highest level since April 15. The currency surged 4.3 percent in the past month, the best performance among the 10 most-traded Asian currencies.

Offshore forwards indicate the rupee will trade at 45.26 to the dollar in three months, compared with expectations of 45.12 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

Source : bloomberg.com