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India’s Rupee Declines a Second Day on Global Slowdown Concern

Oct. 15 (Bloomberg) -- India’s rupee fell for a second day on concern a deepening slowdown in the global economy will deter investment in the nation’s shares.

A government report today showed inflation accelerated to 7.81 percent last month, exceeding the median estimate of 7.7 percent in a Bloomberg survey. Bank of Israel Governor Stanley Fischer said in Tokyo on Oct. 13 that the world is “awfully close” to a recession, while economists predict China’s economy expanded 7.4 percent last quarter, the slowest pace since 2009.

“Weak sentiment from global markets is weighing on the rupee,” said Pramit Brahmbhatt, Mumbai-based chief executive officer at Alpari Financial Services India Ltd. “China’s third-quarter growth numbers are in focus.”

The rupee declined 0.4 percent to 53.0150 per dollar in Mumbai, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 10 basis points, or 0.1 percentage point, to 11.20 percent.

India’s wholesale prices rose 7.81 percent from a year earlier, compared with a 7.55 percent gain in August. The median of 35 estimates in a Bloomberg News survey was for a 7.7 percent gain. Inflation was boosted by an increase in state-set diesel prices.

Three-month onshore rupee forwards were at 53.93 a dollar, compared with 53.77 on Oct. 12, and offshore non-deliverable contracts were at 53.69 versus 53.56. 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 jrodrigues26@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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