India Rupee Drops Most in More Than Two Weeks as GDP Report Eyedby
Economic expansion slowed to 7.1 percent last quarter: survey
Dollar strength also weighing on Asian currencies: Edelweiss
India’s rupee fell the most in more than two weeks ahead of a report that will likely show growth in Asia’s third-largest economy slowed last quarter.
Gross domestic product probably rose 7.1 percent from a year earlier in the three months ended Dec. 31, after a 7.4 percent increase in the previous period, a median estimate in a Bloomberg survey shows before data due after the close of markets. Global funds have withdrawn a net $1.8 billion from local stocks in 2016, making the rupee Asia’s worst-performing currency this year.
“The expectation of weaker growth is perhaps weighing on the rupee,” said Ankur Jhaveri, co-head of currencies and rates at Edelweiss Financial Services Ltd. in Mumbai. “Also, Asian currencies in general have been pressured by the U.S. dollar’s recent strength.”
The rupee weakened 0.4 percent, the most since Jan. 20, to 67.94 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. That took its decline this year to 2.6 percent. A gauge of the greenback extended gains Monday after rising 0.6 percent Friday in its biggest jump since Dec. 17.
The yield on Indian sovereign bonds due May 2025 rose one basis point to 7.84 percent, prices from the central bank’s trading system show. That on the new 10-year note due 2026 climbed two basis points to 7.73 percent.
The Reserve Bank of India bought 100 billion rupees ($1.5 billion) of notes as planned on Monday, according to a statement. The monetary authority, which began open-market purchases of debt in December after a gap of almost two years, has now bought securities worth 300 billion rupees via three auctions as it addresses a cash shortage in the banking system.
Most Asian markets, including those in China, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea and Taiwan, were closed Monday for lunar New Year holidays.