By -
Jul 23, 2014
India’s rupee strengthened the most
in more than a week as a pickup in seasonal rainfall tempered
concern inflation will accelerate.
The deficit in the June-September monsoon, which accounts for more than 70 percent of India’s annual rainfall, has narrowed to 27 percent of the 50-year average, the weather department said yesterday. The gap was 43 percent on July 11. Gains in India’s consumer-price index slowed to 7.31 percent in June, the least since the gauge was introduced in January 2012.
The rupee climbed 0.1 percent to 60.1875 per dollar as of 10:30 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. That’s the biggest gain since July 11. The yield on the 8.83 percent sovereign notes due November 2023 was little changed at 8.69 percent, according to the Reserve Bank of India’s trading system. That’s the lowest since July 4.
“A revival in monsoon rains would be seen as a positive,” said Anindya Banerjee, a currency analyst at Kotak Securities Ltd. in Mumbai. “The rupee is likely to remain range-bound as the RBI seeks to keep the currency stable.”
The rupee also gained amid increased capital inflows, said Banerjee. Global investors have pumped more than $4 billion into the nation’s bonds and stocks this month as Prime Minister Narendra Modi’s government unveiled plans to narrow the budget deficit and allow more foreign investment in industries.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 27 basis points, or 0.27 percentage point, to 5.97 percent in Mumbai, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forwards on the rupee rose 0.1 percent to 60.94 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 the greenback.
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 Anil Varma, Robin Ganguly
The deficit in the June-September monsoon, which accounts for more than 70 percent of India’s annual rainfall, has narrowed to 27 percent of the 50-year average, the weather department said yesterday. The gap was 43 percent on July 11. Gains in India’s consumer-price index slowed to 7.31 percent in June, the least since the gauge was introduced in January 2012.
The rupee climbed 0.1 percent to 60.1875 per dollar as of 10:30 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. That’s the biggest gain since July 11. The yield on the 8.83 percent sovereign notes due November 2023 was little changed at 8.69 percent, according to the Reserve Bank of India’s trading system. That’s the lowest since July 4.
“A revival in monsoon rains would be seen as a positive,” said Anindya Banerjee, a currency analyst at Kotak Securities Ltd. in Mumbai. “The rupee is likely to remain range-bound as the RBI seeks to keep the currency stable.”
The rupee also gained amid increased capital inflows, said Banerjee. Global investors have pumped more than $4 billion into the nation’s bonds and stocks this month as Prime Minister Narendra Modi’s government unveiled plans to narrow the budget deficit and allow more foreign investment in industries.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 27 basis points, or 0.27 percentage point, to 5.97 percent in Mumbai, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forwards on the rupee rose 0.1 percent to 60.94 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 the greenback.
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 Anil Varma, Robin Ganguly
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