Mumbai: The rupee weakened, snapping a three-day gain, as concern a debt crisis in Greece will spread to other European economies damped demand for riskier assets and bolstered demand for dollars.
The rupee’s losses were limited as latest stock-exchange data showed foreigners raised holdings of local shares to a record $78.9 billion on 23 April.
Greece-related concerns just refuse to go away, said Vikas Babu, a currency trader at Andhra Bank in Mumbai. Debt yields are rising in many parts of Europe and the question now is, how many more cases like Greece are waiting to come out.
The rupee declined 0.1% to 44.445 per dollar in Mumbai, according to data compiled by Bloomberg. That pared the currency’s advance this year to 4.7%, still the third-best performance among Asian currencies. The rupee reached a 19-month high of 44.165 on 15 April. It will trade between 44.30 and 44.70 in the coming days, Babu predicted. The rupee is getting support from capital flows attracted by India’s economic growth, he said.