By Anil Varma
May 15 (Bloomberg) -- India's rupee fell to a 13-month low on concern near-record oil prices will boost the nation's import bill, widening the trade and current-account deficits.
The currency declined for a fourth day on speculation local refiners increased purchases of foreign currency required to pay for crude oil imports after the commodity in New York rose to an all-time high $126.98 per barrel this week. Asia's third-largest economy depends on shipments from abroad to meet three-quarters of its energy needs.
``The rupee's persistent weakness is mainly due to the rally in energy prices and consequent worries about the trade and current-account deficits,'' said Parthasarathi Mukherjee, treasurer at Axis Bank Ltd. in Mumbai. ``The rupee may remain under pressure as long as the uncertainty on oil continues.''
The rupee weakened 0.6 percent to 42.705 versus the dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. The currency's 7.4 percent loss this year is the third-worst performance among the 10 most-traded Asian currencies after the South Korean won and the Thai baht.
India's currency has fallen 8.7 percent in the past six months as oil prices advanced 34 percent. Oil imports rose to a record $8.6 billion in March, government data show.
Trade Deficit
The South Asian nation's trade deficit widened to an all- time high of $25.4 billion in the three months through December, according to the central bank. The current-account shortfall, a measure of trade and investment flows, increased to $5.4 billion in the same quarter from $4.7 billion.
The rupee rose earlier on speculation exporters purchased the currency as it headed for a fourth straight weekly loss. A weaker currency increases the income of exporters when they repatriate their earnings.
``The rupee recovered some ground as exporters are entering into contracts to sell earnings due in the near term,'' said Puneet Sharma, chief currency trader at state-owned Allahabad Bank in Mumbai. ``The levels probably look better for selling dollars after the rupee's recent losses.''
India's export earnings grew at an average monthly pace of 27.4 percent during the quarter ended March 31, compared with 26.1 percent in the previous three months, according to government data.
To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.
Last Updated: May 15, 2008 08:01 EDT
May 15 (Bloomberg) -- India's rupee fell to a 13-month low on concern near-record oil prices will boost the nation's import bill, widening the trade and current-account deficits.
The currency declined for a fourth day on speculation local refiners increased purchases of foreign currency required to pay for crude oil imports after the commodity in New York rose to an all-time high $126.98 per barrel this week. Asia's third-largest economy depends on shipments from abroad to meet three-quarters of its energy needs.
``The rupee's persistent weakness is mainly due to the rally in energy prices and consequent worries about the trade and current-account deficits,'' said Parthasarathi Mukherjee, treasurer at Axis Bank Ltd. in Mumbai. ``The rupee may remain under pressure as long as the uncertainty on oil continues.''
The rupee weakened 0.6 percent to 42.705 versus the dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. The currency's 7.4 percent loss this year is the third-worst performance among the 10 most-traded Asian currencies after the South Korean won and the Thai baht.
India's currency has fallen 8.7 percent in the past six months as oil prices advanced 34 percent. Oil imports rose to a record $8.6 billion in March, government data show.
Trade Deficit
The South Asian nation's trade deficit widened to an all- time high of $25.4 billion in the three months through December, according to the central bank. The current-account shortfall, a measure of trade and investment flows, increased to $5.4 billion in the same quarter from $4.7 billion.
The rupee rose earlier on speculation exporters purchased the currency as it headed for a fourth straight weekly loss. A weaker currency increases the income of exporters when they repatriate their earnings.
``The rupee recovered some ground as exporters are entering into contracts to sell earnings due in the near term,'' said Puneet Sharma, chief currency trader at state-owned Allahabad Bank in Mumbai. ``The levels probably look better for selling dollars after the rupee's recent losses.''
India's export earnings grew at an average monthly pace of 27.4 percent during the quarter ended March 31, compared with 26.1 percent in the previous three months, according to government data.
To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.
Last Updated: May 15, 2008 08:01 EDT
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