Indian Rupee Erases Gains on Speculation Importers Bought Dollar
India’s rupee was little changed, after erasing earlier gains, on speculation importers stepped up dollar purchases to pay month-end bills.
The rupee lost 0.9 percent this week, the worst performance among Asian currencies, as Standard & Poor’s lowered the nation’s credit outlook to negative, citing risks from budget and current-account deficits. It climbed earlier on optimism U.S. policy makers’ efforts to spur the world’s largest economy will help boost global growth.
“Demand for dollar strengthened from importers as they probably believed the rupee is set to weaken,” said Vikas Babu, a foreign-exchange trader in Mumbai at state-owned Andhra Bank. (ANDB) “The rupee may be under pressure for the short-term.”
The rupee traded at 52.555 per dollar in Mumbai, versus 52.545 yesterday, according to data compiled by Bloomberg. It appreciated to 52.425 earlier.
Offshore forwards indicate the rupee will trade at 53.67 to the dollar in three months, compared with expectations of 53.69 yesterday. 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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