Indian currency falls on trade gap concerns as oil soars to record

MUMBAI: India??™s currency dropped the most in three weeks after crude oil in New York rose to a record, adding to concern the trade gap will widen and importers will need to convert more rupees into dollars to pay for purchases.

The rupee fell on Wednesday after bomb attacks on trains and in commuter stations in Mumbai killed at least 182 people on Tuesday.

???India??™s a big importer of oil so when the oil price rises that??™s a threat to the deficit and worsens the situation,??? said Craig Chan, a strategist at Royal Bank of Scotland Plc in Hong Kong.

???The Indian rupee is definitely not one of my favorite currencies as the political risk has jumped.???

The rupee fell 0.2% to 46.333 per dollar at the close of trading in Mumbai, according to foreign-exchange broker Kanji Pitamber & Co It may drop to 46.40 by the end of next week, Chan said.

The country??™s trade gap widened to $39bn in the financial year ended March 31, from $28.6bn the previous year, Trade Minister Kamal Nath said April 7, partly due to oil prices, which have risen 24% this year. ??“ Bloomberg