Rupee fell to the lowest level in a month as foreign investment in local stocks declined amid concern the global economic recovery is faltering.
The rupee weakened beyond 47 per dollar for the first time since June 10 as data from the Sebi showed overseas funds sold more Indian equities than they bought on July 2 and July 5, lowering holdings from a record. The rupee also declined in the offshore forwards market after a report showed a gauge of growth in US service industries slumped to a four-month low.
?The rupee is tracking the negative sentiment in the non- deliverable forwards market and Asian equities,? said Jaiprakash Israni, a currency trader at Andhra Bank.
The rupee declined 0.3% to 47.03 per dollar. The currency reached 47.16 earlier, the weakest level since June 7.
However, 10-year bonds rose the most in more than a week on optimism monsoon rains will boost farm output, helping contain inflation.
Yields fell a second day after the weather office said the entire country has been covered by the rains. The monsoon usually blankets the nation by July 15. The wholesale-price index of farm products fell to an eight-month low of 12.92% in the week ended June 19 from a year earlier. The yield on the 7.80% note due May 2020 declined four basis points, or 0.04 percentage point, to 7.57%. The price rose 0.26, or 26 paise per Rs 100 face amount, to Rs 101.54.