By V. Ramakrishnan Jan. 25 (Bloomberg) -- India’s rupee fell for a fifth day on speculation a U.S. government proposal to limit risk-taking at financial companies will cool investor appetite for emerging- market assets. The currency approached a three-week low as the Bombay Stock Exchange’s Sensitive Index, or Sensex, dropped 0.7 percent. Overseas investors sold $165 million more Indian equities than they purchased in the four days through Jan. 21, according to stock exchange data. Global equity markets slumped after President Barack Obama last week unveiled a plan to curb proprietary trading at banks to prevent another financial crisis. “The sentiment is bearish for the rupee because investors are fleeing emerging-market assets following Obama’s bank plans,” said Naveen Raghuvanshi, a currency trader at Development Credit Bank in Mumbai. “But it may not weaken further because this may be good level for exporters to sell dollars.” The rupee fell 0.2 percent to 46.22 per dollar as of 10:06 .m. in Mumbai, according to data compiled by Bloomberg. The rupee fell 0.8 percent last week. The MSCI Asia Pacific Index declined 0.5 percent today. Offshore contracts indicate bets the rupee will trade at 46.28 to the dollar in a month, compared with 46.25 on Jan. 22. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency. To contact the reporters on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net.

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