Indian Rupee Slumps as Forecasts Promise Widening Account Deficit

The Indian rupee slumped today on concerns that the nation’s current-account deficit would widen as India’s central bank blocked dollar or euro payments for Iranian oil.

India’s current account deficit increased from $12.1 billion in the second quarter of 2010 to $15.8 billion in the third quarter and may jump to $17 billion in the first half of this year, according to the analysts’ forecast. The economists predict that, as a result, the attractiveness of the rupee will fall and the currency may tumble 4.5 percent in 2011.

USD/INR jumped from 44.620 to 44.941 as of 11:06 GMT today.

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