In­dia's rupee declines to two-year low as ex­port slump deep­ens


In­dia's rupee fell to its weak­est level in two years as a slump in ex­ports drove the na­tion's trade deficit to an eight-month high. The short­fall reached $12.8 bil­lion in July as over­seas ship­ments dropped 10.3 per­cent from a year ear­lier, of­fi­cial fig­ures showed af­ter the close of trad­ing on Fri­day. Ex­ports slipped for an eighth month, the long­est run of declines since 2009. China's sur­prise yuan de­val­u­a­tion last week reignited con­cern of a re­gional cur­rency war as Viet­nam widened the dong's trad­ing band.

The rupee weak­ened 0.5 per­cent to 65.3125 a dol­lar at close in Mum­bai on Mon­day, ac­cord­ing to prices from lo­cal banks com­piled by Bloomberg. The cur­rency slid to 65.3750 in in­tra­day trad­ing, its low­est level since Septem­ber 2013. Sov­er­eign bonds were steady on Mon­day while the bench­mark S&P BSE Sen­sex in­dex of shares lost 0.7 per­cent.

"The wider trade deficit is a mat­ter of con­cern," said Naveen Raghu­van­shi, a Mum­bai-based cur­rency trader at DCB Bank Ltd. "Broad gains in the dol­lar and losses in lo­cal eq­ui­ties are also weigh­ing on the rupee." The Bloomberg Dol­lar Spot In­dex ad­vanced for a third day. A re­port on U.S. man­u­fac­tur­ing Mon­day may of­fer clues on the tim­ing of the Fed­eral Re­serve's first in­ter­est-rate in­crease since 2006. Weak ex­ports con­tinue to off­set re­lief from a lower com­mod­ity im­ports bill for In­dia, DBS Bank Ltd. econ­o­mists, in­clud­ing Sin­ga­pore-based Rad­hika Rao, wrote in a re­port.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.