In more than 5 weeks, India’s rupee rose to the strongest level after the Federal Reserve cut its benchmark interest rate to a record low, boosting demand for higher-yielding assets.
As the global stocks rallied, the currency gained for a third day.
Sean Callow, currency strategist with Westpac Banking Corp. in Sydney said, “Average daily purchases of Indian shares this month by overseas investors exceeded sales for the first time since April, data from the nation’s capital markets regulator showed. The rupee may extend its advance on the Fed’s near-zero rate policy, targeting 46.90 over the next few sessions. The rupee may benefit more from the equity bounce than some of its regional peers.”
According to data compiled by Bloomberg in Mumbai, the rupee strengthened 1.2 % to 47.34 per dollar as of 9:16 a.m.
On December 2 , India’s rupee rebounded by almost 7 % from a record low of 50.615. The currency’s 16.8 % loss in present year is yet the largest since 1991, when a balance of payments crisis forced the South Asian nation to pawn its gold with the International Monetary Fund to pay for imports.
