India’s rupee fell to a record, prompting the central bank to say it’s weighing action to stem the worst performance in Asia this year.
The rupee weakened 0.3 percent to 52.3225 per dollar in Mumbai, bringing its decline in 2011 to 14.6 percent. The BSE India Sensitive Index (SENSEX) of shares tumbled 22 percent in the period as investors sold emerging market assets on concern the U.S. and Europe will struggle to curb deficits.
The rupee’s slump is raising costs for companies including Hindustan Unilever Ltd. (HUVR) and Maruti Suzuki India Ltd. (MSIL) A further drop will also spur price gains and increase fuel subsidy costs in Asia’s third-largest economy, which imports 80 percent of its fuel. Inflation has held above 9 percent for 11 consecutive months, while higher interest rates are threatening to slow the pace of economic expansion.
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