Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

India’s Rupee Declines as U.S. Rate Increase Bets Boost Dollar

Aug. 21 (Bloomberg) -- India’s rupee fell for the first time in four days on concern the Federal Reserve will increase interest rates, reducing the flow of funds to emerging markets.

“Many” participants at the U.S. monetary authority’s July meeting said they might have to raise borrowing costs sooner than anticipated, according to minutes released yesterday. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose to a six-month high today.

“The rupee’s weakness is mainly because of the Fed minutes, which were a tad hawkish,” said Anindya Banerjee, a currency analyst at Kotak Securities Ltd. in Mumbai. “The more hawkish the Fed gets, the more uncomfortable speculators are.”

The currency fell 0.1 percent at the close at 60.6750 per dollar in Mumbai, prices from local banks compiled by Bloomberg show. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell six basis points, or 0.06 percentage point, to 7.12 percent.

Three-month offshore non-deliverable forwards were little changed at 61.64 per dollar, data compiled by Bloomberg show. 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: Kartik Goyal in Mumbai at kgoyal@bloomberg.net

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.