India’s Rupee Declines a Second Day on Global Slowdown Concern
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.
The BSE India Sensitive Index (SENSEX) of shares fell 0.2 percent before a government report due around noon today in New Delhi that is expected to show inflation accelerated last month. Bank of Israel Governor Stanley Fischer said in Tokyo on Oct. 13 that the world is “awfully close” to a recession before data due Oct. 18 that economists predict will show 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 53.0450 per dollar as of 10:10 a.m. 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 7.70 percent from a year earlier, compared with a 7.55 percent gain in August, according to the median of 35 estimates in a Bloomberg News survey. Inflation was boosted by an increase in state-set diesel prices.
Three-month onshore rupee forwards were at 53.94 a dollar, compared with 53.77 on Oct. 12, and offshore non-deliverable contracts were at 53.75 versus 53.56. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.