India’s rupee fell on speculation crude oil near a record will increase demand for dollars needed to pay for the commodity.
The Indian rupee fell on Tuesday heading towards new 13-month lows with weak Asian stocks seen dampening foreign appetite for local stocks and renewed dollar buying by oil refiners to meet their month-end needs.
* At 9:14 a.m. (0344 GMT), the partially convertible rupee was at 42.62/63 per dollar, weaker than Friday’s close of 42.53/54 and a low of 42.92, which was its weakest since April 12, 2007, according to Reuters data. Markets were closed on Monday for a holiday.
* Asian stocks edged lower on Tuesday, snapping a six-day rising trend, weighed by retailers as oil continued a relentless rise, keeping inflation fears high.
* Oil CLc1, India’s biggest import, hit record highs above $127 a barrel on Friday, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.
The rupee declined 0.3 percent to 42.635 per dollar as of 9:04 a.m. in Mumbai, from 42.5125 on May 16, according to data compiled by Bloomberg. Markets were closed yesterday for a holiday.
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