By -
Sep 23, 2014
India’s rupee fell for the first
time in six days on speculation importers boosted dollar
purchases to pay month-end bills.
The Indian currency weakened 0.2 percent to 60.9100 per dollar as of 9:47 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. The rupee has gained 1.4 percent this year, after plunging 11 percent in 2013, supported by $34 billion of inflows into local stocks and bonds.
“Month-end dollar demand by importers is impacting the rupee,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd. in Mumbai. “The rupee’s direction is highly dependent on foreign flows.”
Improving economic growth and slowing inflation are attracting overseas investment. Consumer-price inflation eased to 7.8 percent in August, from 7.96 percent in July, and the economy expanded 5.7 percent in the second quarter, the fastest pace since 2012.
The rupee should outperform regional currencies including Malaysia’s ringgit and Indonesia’s rupiah as lower commodity prices will help curb India’s import bill and reduce inflationary pressure, Jonathan Cavenagh, a foreign-exchange strategist at Westpac Banking Corp. in Singapore, wrote in a research note last week.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose eight basis points, or 0.08 percentage point, to 7.03 percent.
Three-month offshore non-deliverable forwards fell 0.1 percent to 61.82 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Andrew Janes
The Indian currency weakened 0.2 percent to 60.9100 per dollar as of 9:47 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. The rupee has gained 1.4 percent this year, after plunging 11 percent in 2013, supported by $34 billion of inflows into local stocks and bonds.
“Month-end dollar demand by importers is impacting the rupee,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd. in Mumbai. “The rupee’s direction is highly dependent on foreign flows.”
Improving economic growth and slowing inflation are attracting overseas investment. Consumer-price inflation eased to 7.8 percent in August, from 7.96 percent in July, and the economy expanded 5.7 percent in the second quarter, the fastest pace since 2012.
The rupee should outperform regional currencies including Malaysia’s ringgit and Indonesia’s rupiah as lower commodity prices will help curb India’s import bill and reduce inflationary pressure, Jonathan Cavenagh, a foreign-exchange strategist at Westpac Banking Corp. in Singapore, wrote in a research note last week.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose eight basis points, or 0.08 percentage point, to 7.03 percent.
Three-month offshore non-deliverable forwards fell 0.1 percent to 61.82 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Andrew Janes
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