Friday, 4 June 2010 at 10:42, Bloomberg
India’s rupee headed for a weekly loss as overseas investors pared investment in the nation’s assets amid a surge in global financial-market volatility.
The currency added to last month’s 4.3 per cent slide, the biggest since February 2009, as funds based abroad cut stockholdings by $2.1 billion from a record-high $79.4 billion reached on April 30. The rupee’s one-month implied volatility rate, a gauge of expected price swings, touched a 15-month high of 18.5 per cent on May 26.
“The rupee is the most vulnerable currency in Asia as it is reliant on support from equity inflows,” said Daniel Hui, a currency strategist at HSBC Holdings Plc in Hong Kong. “The Indian rupee is our least favorite” currency in Asia.
The rupee slid 0.6 percent this week to 46.66 per dollar as of 10:14 Am in Mumbai, according to data.
Offshore forwards indicated the Indian currency will trade at 47.08 to the dollar in three months, compared with expectations of 46.79 at the end of last week. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.
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