India’s rupee was set for a fourth weekly decline after foreign funds pulled money from local assets and as Standard & Poor’s cut the nation’s credit-rating outlook.
The rupee touched a three-month low on April 24, a day before S&P lowered the sovereign credit outlook to negative from stable citing diminishing growth prospects and the widening current-account deficit. Overseas investors sold $277 million more local stocks than they bought in the first three days of the week and pulled $204 million from Indian bonds this month through April 25, exchange data show.
“Investors are probably selling the rupee because the fundamentals may weaken in the short term,” said Sudarshan Bhatt, chief currency trader at state-run Corporation Bank in Mumbai. “The outflows are accelerating based on this sentiment and the rupee may weaken further.”
The rupee fell 1 percent this week to 52.585 per dollar as of 9:57 a.m. in Mumbai, according to data compiled by Bloomberg. It dropped 0.1 percent today. The currency’s 3.2 percent decline this month is the worst performance among the 10 most-traded Asia currencies excluding the yen.
Asia’s third-biggest economy probably expanded 6.9 percent in the year through March, the least in three years, according to a government forecast on Feb. 7 before official data due next month.
Three-month offshore non-deliverable forward contracts traded at 53.69 a dollar, compared with 53.22 at the end of last week and 53.65 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.