Indian Rupee Falls Most in 3 Weeks as Importers May Buy Dollars

Jan. 12 -- India’s rupee fell on speculation local importers will increase dollar purchases to take advantage of the local currency’s gain to a 15-month high.

The rupee dropped the most in more than three weeks as the Dollar Index, which tracks the greenback against those of six major trading partners, rose 0.2 percent. The rupee has strengthened 2.3 percent since Dec. 31, extending a 4.8 percent advance last year.

“Dollar demand is likely to increase as the levels look attractive for importers,” said Jaiprakash Israni, a currency trader in Mumbai at state-owned Andhra Bank. “The rupee is weaker in the offshore market too as the dollar index has risen.”

The rupee slid 0.3 percent to 45.46 per dollar as of 10:47 a.m. in Mumbai, according to data compiled by Bloomberg. It reached 45.2750 yesterday, the highest level since September 2008. The currency may trade between 45.35 and 45.75 today, Israni said.

Offshore contracts indicate bets the rupee will trade at 45.49 to the dollar in a month, compared with expectations of 45.33 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.