Rupee weakens on speculation of low demand

Rupee weakens on speculation of low demand

Mumbai: The rupee weakened on Wednesday, snapping a five-day advance, on speculation local importers increased purchases of foreign currency to settle month-end bills.

Rupee dropped from a six-week high as the nation’s refiners including Indian Oil Corp. Ltd may have stepped up dollar buying to pay for costlier crude oil imports.

Oil prices in New York have risen 60% this year.

The rupee also fell as the Bombay Stock Exchange’s sensitive index slid 1%, its first loss in six days.

The rupee declined as there are some signs that dollar demand from importers will increase as we approach the end of the month, said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai.

Rupee slipped 0.1% to 48.005 per dollar at close in Mumbai, according to data compiled by Bloomberg. It earlier reached 47.865, the strongest level since 10 August.

Offshore contracts indicate bets the rupee will trade at 48.02 per dollar in a month, compared with expectations of 48.03 on Tuesday.