India Rupee, Bonds Drop on Concern Global Funds to Cut Holdings

India’s rupee declined as a selloff in Asian currencies exacerbated concern that global investors will dump the nation’s assets as they head for safer ground.

Foreign holdings of rupee-denominated debt have fallen by 26 billion rupees ($380 million) in the last five trading days, data from National Securities Depository Ltd. show, while stocks have seen withdrawals of $2.3 billion this year. A measure of Asian exchange rates retreated by the most in more than a month on Tuesday.

“Foreign inflows have stayed negative for both debt and equities, which is adding pressure on the rupee,” said Rohan Lasrado, head of foreign-exchange trading at RBL Bank Ltd. in Mumbai. “We are keenly watching local stocks to assess the direction of the currency.”

The rupee retreated 0.5 percent to 68.3825 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. That’s the lowest closing for the currency since Aug, 2013. The benchmark S&P BSE Sensex of equities fell 1.5 percent on Tuesday.

Government bonds fell, with the yield on notes due January 2026 rising three basis points to 7.78 percent, prices from the central bank’s trading system show. That’s the highest yield since the securities were issued early last month.

Before it's here, it's on the Bloomberg Terminal.