The rupee headed for the biggest monthly decline since May 2006 as global funds pared emerging market assets, selling a record amount of Indian shares. The currency has declined 1.9 per cent from a nine-year high reached on July 24 as overseas portfolio managers sold $1.8 billion more of Indian stocks than they bought this month. Record purchases in July made the rupee Asia's best performer this year. | |
| "We recommend investors to stay short rupees,'' said Vikas Agarwal, a currency strategist at JPMorgan Chase in Mumbai. "We've already seen outflows and with the situation still fluid, the risk of further large liquidation is real.'' A short position is a bet on a currency declining. |
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| The rupee fell 1.6 per cent this month to 41.005 against the dollar. The Sensex is poised to end a five-month rally as subprime losses in the US spread to global credit markets, prompting investors to raise cash. |
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| A record pace of growth in Asia's fourth-biggest economy fuelled a rally in the rupee this year, pushing it up almost 8 per cent. |
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| Growth accelerated to 9.3 per cent in the quarter ended June 30 from a year earlier, the Central Statistical Organisation said. |
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| Economic expansion averaged 8.6 percent in the last four years. |
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| Foreign direct investment into India more than doubled to $19.5 billion in the year ended March 31. Capital flows into the stock reached a net $5.9 billion in July, a record, according to the Securities & Exchange Board of India. |
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