Mumbai: India’s rupee declined the most in almost a month on concern Asia’s weakening economic data will cause overseas investors to take money out of the region.
Offshore forwards contracts show traders increased bets for depreciation in the rupee as Asian stocks and currencies slumped. Japanese industrial production fell for a fifth month in February, the longest losing streak since 2001, a government report showed on Monday, a further sign that the recession is damping spending.
Asian stocks and currencies are lower as fresh data suggest the economic crisis is only deepening, said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. The rupee is responding to that sentiment as non-deliverable forwards show the way.
The rupee dropped 1.1% to 51.16 per dollar at the 5pm close in Mumbai, its biggest drop since 2 March, according to Bloomberg data. The currency is headed for a fifth quarter of declines, the longest run of losses since 2002, and was little changed from the end of February. It’s the second worst performer among the 10 most-traded Asian currencies in the past 12 months, declining 22%.
The rupee also fell as a gauge that tracks the rupee against six major currencies rose to the highest in almost two weeks, fueling speculation demand for the greenback is increasing.