March 1 (Bloomberg) -- India’s rupee weakened, snapping a two-day gain, after the Federal Reserve refrained from signaling more monetary easing.
Funds pumped into the U.S. economy have filtered through to Asia where interest rates are higher, with Fed Chairman Ben S. Bernanke reiterating yesterday that borrowing costs will probably stay low through late 2014. Foreign investors added $5 billion to holdings of Indian stocks last month through Feb. 28, exchange data show, the most since October 2010.
“Bernanke failed to offer an indication of further easing, boosting the dollar,” Pramit Brahmbhatt, chief executive officer of Alpari’s India unit in Mumbai, wrote in an e-mail today.
The rupee declined 0.4 percent to 49.22 per dollar in Mumbai, according to data compiled by Bloomberg. The currency strengthened 0.9 percent last month, extending January’s record 7.3 percent advance.
Three-month offshore non-deliverable forward contracts traded at 50.28 a dollar, compared with 50.06 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Sandy Hendry at email@example.com