Rupee nears seven-week low as investors pull out

Rupee nears seven-week low as investors pull out

Singapore: The rupee fell, approaching a seven-week low, after overseas investors pulled funds from the country’s stocks and the central bank governor warned the current-account deficit was unsustainable.

Global funds sold $755 million (Rs3,450 crore) more Indian equities than they bought this year through 25 January, exchange data show.

Reserve Bank of India governor Duvvuri Subbarao said on January 25 that the current account shortfall will equal 3.5% of gross domestic product in the fiscal year through March.

“There is an equity outflow and that is possibly putting some pressure on the rupee," said Mirza Baig, a Singapore-based currency strategist at Deutsche Bank AG, the world’s largest foreign-exchange trader.

The rupee fell 0.4% to 45.7562 per dollar on Friday. It earlier touched 45.8450, near the 45.90 reached on 21 January, which was the weakest since 1 December.

The currency lost 0.3% for the week, its second five-day decline.

The current account deficit reached an all-time high of $15.8 billion in the quarter ended 30 September, central bank data show.

The Sensex stock index fell for a third consecutive trading day and has declined more than 10% this year.