Rupee decline extends to fourth day in row

MARKET ROUND-UP

The rupee fell for a fourth day, its longest losing streak in more than three months, on speculation importers sold the currency for dollars to pay their month-end bills.

Importers such as Indian Oil Corporation, the country's biggest refiner, buy more dollars towards the end of each month to settle overseas payments. The country meets three-quarters of its energy needs from abroad.

"We are experiencing some dollar demand pressure from importers as is typical near the end of a month,'' said D Sampath Kumar, treasurer at IndusInd Bank in Mumbai. "Refiners may buy more dollars after the rise in crude oil prices earlier this week.''

The rupee weakened 0.1 per cent to 44.25 against the dollar as of the 5 pm close in Mumbai, according to data compiled by Bloomberg.

Crude oil for April delivery ended trading at $60.07 a barrel yesterday on the New York Mercantile Exchange, the highest close since December 29.

The rupee pared losses on speculation overseas investors will buy more local shares to benefit from the expansion in the world's second-fastest growing economy.

"Capital flows are strong, which is why the rupee hasn't declined in a big way,'' said Parthasarathi Mukherjee, treasurer at UTI Bank in Mumbai. "What we are seeing is a temporary phase. It hasn't changed the broad outlook. The rupee will resume its rising trend soon.''

The currency may gain to 44.10 against the dollar by the end of the month, Mukherjee said.

Global fund managers have sold more domestic stocks than they bought on only two days this month through February 20, according to the latest figures from the Securities and Exchange Board of India.