India’s rupee tumbled the most in 15 months as a government report showed industrial production grew in July at the slowest pace in almost two years.
The currency slid for a sixth day, the longest losing streak in a month, as the statistics office said factory output rose 3.3 percent from a year earlier, after an 8.8 percent gain in June. The median forecast of 26 economists in a Bloomberg News survey was for a 6.2 percent increase. The rupee slid past 47 per dollar for the first time since August 2010 as global funds favored the dollar’s relative safety over emerging-market assets on concern Europe’s debt crisis is worsening.
“The data showed India’s economy is slowing and it does seem that there is further downside in growth momentum,” said Manik Narain, a foreign-exchange strategist in London at UBS AG. “We think the rupee could come under further pressure in the near term.”
The rupee fell 1.4 percent to 47.215 per dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. That’s the steepest drop since June 1, 2010. The currency earlier touched 47.23, the weakest level since July 22, 2010. It has lost 5.3 percent this year, the worst performance among the 10 most-traded Asian exchange rates.
The Dollar Index, which tracks the U.S. currency against those of six major trading partners, climbed to the highest level since February. Germany’s government is preparing plans to shore up the nation’s banks in the event that Greece defaults on its debt, three coalition officials said on Sept. 9.
“The rupee’s performance is driven by the dollar’s strength against major currencies,” said J. Moses Harding, an executive vice president at IndusInd Bank Ltd. in Mumbai.
Offshore forwards indicate the rupee will trade at 47.73 to the dollar in three months, compared with expectations of 47.11 on Sept. 9. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.