Mumbai: India’s rupee fell for the second week on speculation importers sold the currency for dollars to pay for inbound shipments.
Importers such as Indian Oil Corp., the nation’s largest refiner, may have used the local currency’s rise on Monday by the most in almost four months to buy cheaper foreign exchange. Slowing capital flows, which helped the rupee post its best annual gain in at least 34 years in 2007, have slowed this year, said Sanjay Arya, treasurer at state-owned Bank of Maharashtra.
“Inconsistency of the capital flows is prompting importers to buy dollars and meet at least some of their requirement,”Arya said.
“I expect the rupee to be under pressure.” The rupee fell 0.1% this week to Rs39.67 per dollar, compared with Rs39.63 a week ago, according to data compiledby Bloomberg. It may slip to Rs39.70 next week, Arya said.