India’s rupee dropped to the lowest level in two weeks on concern economic growth will slow, damping demand for the nation’s assets.
Industrial production growth may ease 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 declined 0.6 percent to 51.4750 per dollar in Mumbai, according to data compiled by Bloomberg. It touched 51.4775 earlier, the lowest level since March 26. One-month implied volatility, a measure of exchange-rate swings used to price options, rose 11 basis points, or 0.11 percentage point, to 10 percent, according to data compiled by Bloomberg.
Six-month onshore forwards traded at 53.21 per dollar, compared with 53.14 yesterday, and offshore non-deliverable contracts were at 53.25 from 53.17. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.