Mumbai India's rupee weakened, snapping a two-day gain, after the US Federal Reserve refrained from signalling more monetary easing.
Funds pumped into the US economy have filtered through to Asia where interest rates are higher, with Fed Chairman Ben S. Bernanke reiterating that borrowing costs will probably stay low through late 2014.
Foreign investors added $5 billion (Dh18 billion) to holdings of Indian stocks last month through February 28, exchange data show, the most since October 2010.
"Bernanke failed to offer an indication of further easing, boosting the dollar," Pramit Brahmbhatt, chief executive officer of Alpari's India unit in Mumbai, wrote in an e-mail yesterday. The rupee declined 0.4 per cent to Rs49.22 per dollar in Mumbai, according to data compiled by Bloomberg.