Indian rupee drops to two-week low

The Indian rupee dropped to a two-week low on Wednesday as falling local stocks triggered concerns about the sustainability of foreign fund inflows in the near term. The partially convertible rupee ended at 48.88/89 per dollar, 0.9 percent below Tuesday's close of 48.45/46 per dollar. It is down 2 percent so far this week. It hit a low of 48.9450 in intraday deals.
Sean Callow, strategist at Westpac in Sydney, said in a note he was not convinced the optimism for economic reforms in India was warranted and said the key factor for the rupee in the near term was external. "Our view of a rocky few weeks for global risk appetite suggests buying 1-month dollar/rupee non-deliverable forwards on dips to the 48.50/60 area, from 48.80/90," he wrote in a note. One-month offshore non-deliverable forwards were quoting at 48.97/49.07 per dollar in late Indian trade.