Rupee touches 1-month low over rise in oil prices

India's rupee fell to the lowest level in more than a month on speculation foreign funds will cut purchases of local assets as oil prices hover near the highest level since May. The currency declined for a third day after overseas investors slowed net buying of local equities to $56 million on March 1, compared with $133 million on Febraury 29 and $174 million the day before, according to exchange data. Crude prices have advanced 7.5 per cent this year, reaching a 10-month high of $110.55 a barrel in New York on March 1. Asia's third-biggest economy imports almost 70 per cent of its energy needs. "There is a preference among investors to hold dollars in comparison to other currencies due to the high oil prices," said Naveen Raghuvanshi, a currency trader at Development Credit Bank in Mumbai. "The rupee is weakening because of this sentiment and I expect further weakness in the near term." The rupee fell 0.7 per cent to 49.8538 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. It touched 49.9550, the lowest level since January 25. The currency may drop to 50 per dollar this week, Raghuvanshi said. Gross domestic product rose 6.1 per cent in the three months through December, the slowest pace in more than two years, the government said last week. Offshore forwards indicate the rupee will trade at 50.94 to the dollar in three months, compared with expectations of 50.56 at the end of last week. From gulfnews