India’s rupee headed for the worst week since November on concern Europe’s debt crisis is eroding economic growth in developing nations.
A government report will show today that gains in India’s factory output slowed to 2.6 percent in December from 5.9 percent the previous month, according to the median of 23 estimates in a Bloomberg News survey. Europe will not disburse aid to Greece without implementation of austerity measures, Luxembourg Prime Minister Jean-Claude Juncker said in Brussels yesterday.
“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 2 percent this week and 0.2 percent today to 49.6050 per dollar as of 9:47 a.m. in Mumbai, according to data compiled by Bloomberg. It touched 49.7250 earlier, the lowest level since Jan. 31.
The government predicted this week India’s gross domestic product will rise 6.9 percent in the year ending March 31, the least since 2009.
Three-month offshore non-deliverable rupee forwards traded at 50.64 a dollar, compared with 50.50 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