Re drops to 13-month low as refiners increase dollar buys

The rupee declined for a third day as local refiners increased dollar purchases to pay for imports of crude oil, which reached an all-time high of $126.98 a barrel in New York yesterday. The currency also weakened after data from India's capital markets regulator showed overseas investors added to sales of local equities.

The rupee weakened 0.8 per cent to 42.445 against the dollar at the 5 pm close in Mumbai after dropping to 42.6775. The currency is the third-worst performer among the most-traded Asian currencies outside Japan this year, losing 7.2 per cent.

"The rupee's depreciating bias continues as oil prices remain high, raising concerns about wider trade and current account deficits,'' said Agam Gupta, head of trading at Standard Chartered's Indian unit in Mumbai.

The currency has fallen about 8 per cent in the past six months as oil prices advanced 33 per cent. India's oil imports rose to a record $8.6 billion in March, government data show. Asia's third-largest economy depends on shipments from abroad to meet three-quarters of its energy needs.