By -
May 20, 2014
India’s rupee rose for a fifth day,
the longest winning streak since March, on optimism fund inflows
will quicken after national elections delivered a clear winner.
The Bharatiya Janata Party secured the first single-party majority in 30 years, putting its prime ministerial candidate Narendra Modi in a position to take steps to revive the economy without being constrained by coalition politics. The BJP won 282 of 543 parliamentary seats, more than the 272 needed to form a government, according to the Election Commission. Global funds bought a net $3.2 billion of local stocks and bonds this month through May 16, the latest exchange data show.
“Continuous flows into the stock market are supporting the appreciation bias in the rupee,” said Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd. “The majority win of the BJP is boosting investor confidence.”
The currency rose 0.1 percent to 58.5350 per dollar as of 9:58 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. It touched 58.3750 yesterday, the strongest level since June 18, 2013. The rupee will probably trade between 58.45 and 58.70 today, according to DCB Bank.
“Sharp gains in the rupee are unlikely as state-owned banks are seen buying the greenback around the 58.45-58.46 levels,” said Raghuvanshi.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell five basis points, or 0.05 percentage point, to 8.10 percent, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forwards declined 0.2 percent to 59.45 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: Divya Patil in Mumbai at dpatil7@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Simon Harvey
The Bharatiya Janata Party secured the first single-party majority in 30 years, putting its prime ministerial candidate Narendra Modi in a position to take steps to revive the economy without being constrained by coalition politics. The BJP won 282 of 543 parliamentary seats, more than the 272 needed to form a government, according to the Election Commission. Global funds bought a net $3.2 billion of local stocks and bonds this month through May 16, the latest exchange data show.
“Continuous flows into the stock market are supporting the appreciation bias in the rupee,” said Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd. “The majority win of the BJP is boosting investor confidence.”
The currency rose 0.1 percent to 58.5350 per dollar as of 9:58 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. It touched 58.3750 yesterday, the strongest level since June 18, 2013. The rupee will probably trade between 58.45 and 58.70 today, according to DCB Bank.
“Sharp gains in the rupee are unlikely as state-owned banks are seen buying the greenback around the 58.45-58.46 levels,” said Raghuvanshi.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell five basis points, or 0.05 percentage point, to 8.10 percent, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forwards declined 0.2 percent to 59.45 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: Divya Patil in Mumbai at dpatil7@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Simon Harvey
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