Re declines on speculations of more $ buys

MARKET ROUND-UP

The rupee had the biggest weekly loss in more than a month on speculation importers are increasing sales of the currency to pay for rising oil costs.

Refiners may have purchased more dollars to boost stocks of crude oil, which gained 12 per cent in the past one month to this year's high, said Pankaj Sharma, chief currency trader at state-owned Union Bank of India. The rupee also declined as a record pace of economic growth strengthened demand for goods from abroad.

"The rupee weakened due to dollar demand from refiners,'' said Sharma. "There's also pressure on the currency because of sustained growth in imports other than oil.'' The rupee fell 0.2 per cent to 44.21 against the dollar this week as of the 5 close in Mumbai, the most since January 12, according to data compiled by Bloomberg. The currency may decline to 44.30, Sharma said.

Crude oil for April delivery was at $61.06 a barrel on the New York Mercantile Exchange. The contract closed yesterday at $60.95, the highest since December 29.

Oil imports in December rose 30 per cent to $4.81 billion, while non-oil imports rose 32 per cent to $10.7 billion.