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Oct. 11 (Bloomberg) -- India’s rupee fell the most in more than two weeks as renewed concern Europe’s debt crisis is worsening prompted investors to favor the dollar’s relative safety over emerging-market assets.
The currency retreated from this month’s strongest level of 48.8675 per dollar, reached earlier today, after European Central Bank President Jean-Claude Trichet said the region’s debt crisis now threatens the financial system. The rupee also declined on speculation some domestic banks bought the greenback, said J. Moses Harding, executive vice president at IndusInd Bank Ltd.
“The underlying trend is bearish given the European concerns and we see tremendous demand for dollars when the rupee” strengthens past 49, Mumbai-based Harding said.
The rupee weakened 0.7 percent to 49.3275 per dollar in Mumbai, according to data compiled by Bloomberg.
Offshore forwards indicate the rupee will trade at 49.97 to the dollar in three months, compared with expectations for a rate of 49.55 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
--Editor: Anil Varma
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at Jrodrigues26@bloomberg.net
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