Indian Rupee Steady After Two-Day Decline on Growth Concern
India’s rupee was little changed after a two-day decline on concern economic growth will slow, damping demand for the nation’s assets.
Industrial production growth eased to 6.6 percent in February from a year earlier, compared with 6.8 percent in January, according to the median of 27 estimates in a Bloomberg News survey before data due this week. The current-account deficit widened to 3.6 percent of gross domestic product in the last quarter of 2011 from 2.97 percent in the preceding three months, official data show.
“In the near term we’re not looking for the rupee to outperform other Asian currencies,” said Nick Verdi, a Singapore-based currency strategist at Barclays Capital. “There are still ongoing issues such as the current-account deficit,” which will need funding through inflows, he said.
The rupee was little changed at 51.1425 per dollar as of 10:03 a.m. in Mumbai, according to data compiled by Bloomberg. It dropped 0.8 percent in the previous two trading days. One- month implied volatility, a measure of exchange-rate swings used to price options, fell nine basis points, or 0.09 percentage point, to 9.8 percent, according to data compiled by Bloomberg.
Six-month onshore forwards traded at 52.96 per dollar, compared with 53.14 yesterday, and offshore non-deliverable contracts were at 53.03 from 53.17. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
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