Aug. 26 (Bloomberg) -- India’s rupee weakened for a third day on speculation the nation’s importers bought foreign currency to meet month-end payments.
The currency declined as local refiners such as Indian Oil Corp., the nation’s biggest, may have stepped up dollar purchases to pay for crude oil imports after the price of the commodity gained almost 4 percent this month. The rupee also fell after traders increased bets for its weakness in the overseas non-deliverable forwards market.
“The rupee is a bit weaker today, mainly because of month- end dollar demand from importers,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. “Some banks have sold the rupee after it fell in the NDF market.”
The rupee lost as much as 0.3 percent to 48.875 per dollar, before trading at 48.8125 as of 9:21 a.m. in Mumbai, according to data compiled by Bloomberg. It is Asia’s worst-performing currency this month with a 1.8 percent loss. The currency may fall as low as 48.95 this week, Bhatt said.
Offshore contracts indicate bets the rupee will trade at 48.92 to the dollar in a month, compared with expectations of 48.85 yesterday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non- deliverable contracts are settled in dollars rather than the local currency.
Source : Bloomberg.com