Rupee declines as investors pare funds

Rupee declines as investors pare funds
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First Published: Fri, Dec 26 2008. 10 03 PM IST
Updated: Fri, Dec 26 2008. 10 03 PM IST
Mumbai: The rupee had the biggest weekly decline in more than a month as the global economic slump and stock losses prompted investors to pare their local holdings.
The rupee was the worst performer this week among the 10 most-active Asian currencies outside Japan as a finance ministry report showed the economy may expand at the slowest pace since 2003.
The currency also fell on speculation importers bought foreign exchange to settle month-end bills.
Global funds sold more local shares than they bought as the benchmark share index completed the biggest weekly drop in two months.
“The global equity situation won’t improve in at least the next six months because of growth concerns, which is why we see further rupee deterioration,” said Nizam Idris, currency strategist at UBS AG in Singapore.
The rupee fell 2.5% this week to 48.445 a dollar in Mumbai. It extended this year’s loss to 18.6%, set for its biggest annual loss since 1991.
The finance ministry on 23 December had said that Asia’s third largest economy may grow as little as 7% in the year ending 31 March.
Overseas investors turned net sellers of Indian equities this week, dumping $152.2 million (Rs729 crore), after purchasing a net $140.4 million last week, according to the Securities and Exchange Board of India.
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First Published: Fri, Dec 26 2008. 10 03 PM IST