Indian rupee drops

The Indian rupee fell sharply on Monday, driven lower by heavy losses in local stocks as a weekend spike in oil prices tripped up Asian markets and fuelled concerns of more equity outflows. The partially convertible rupee ended at 42.87/88 to a dollar, off a low of 42.95, but still 0.5 percent weaker than Friday's close of 42.66/67. It hit a 13-month low of 43.21 per dollar in late May.
"Oil spiked dramatically over the weekend and equity has performed poorly as well. The combination of these two factors has put pressure on the rupee," a dealer with a foreign bank said. Dealers said the central bank could have sold dollars in the market at around 42.93 levels to curtail a sharp depreciation in the rupee. The rupee has swayed with foreign capital flows in recent years. Foreigners have so far dumped $4.7 billion of Indian stocks this year, pushing the rupee lower by 8 percent.