India rupee futures weaken in pre-Asia trade
NEW YORK Aug 19 (Reuters) - The partially convertible Indian rupee weakened in the futures market late in New York trade on Monday, signaling the currency is likely to find more sellers once Asian trade opens for business on Tuesday.
India's rupee is down more than 13 percent in spot trading against the U.S. dollar so far this year, with the majority of the decline coming after the U.S. Federal Reserve hinted in May that it would begin slowing its pace of quantitative easing.
In late New York trade, one-month dollar rupee non-deliverable forwards gapped to a record high 64.50, albeit on thin volume. Trading in these forward contracts closed in Europe at 63.50.
The bid on the rupee was last at 63.12 per U.S. dollar according to Thomson Reuters data, a record low for Asia's third-largest economy.
India's central bank has proven unable to stem the rupee's selloff, despite intervention and curbs on outflows from companies and individuals, which have dented India's stock and bond markets.
Shares of India-focused exchange traded funds were sharply lower in New York stock market trading.
For a factbox on the latest initiatives to slow the rupee's decline, click on
Investor anticipation of the Fed's move to slow its purchases of bonds has resulted in higher yields on government bonds, raising the attractiveness of the dollar and dollar-denominated assets.
It also highlights India's struggle, as well as those of other emerging market nations, to narrow their current account deficits. These deficits make their currencies more vulnerable to sudden capital flight when cheap money supplied by central banks slows.
India's current account deficit hit a record high 4.8 percent of gross domestic product, while its economic growth has slowed to a decade low of 5 percent.
Indonesia's rupiah has also come under severe selling pressure, falling to a four-year low of 10,490 per dollar on Monday after the Bank of Indonesia reported its current account deficit widened to 4.4 percent of GDP in the second quarter.
Its one-month NDF reached 10,920 in thin New York trade against the greenback, its weakest point since April 2009.
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