By Anil Varma April 5 (Bloomberg) -- India’s rupee strengthened to a 19- month high after overseas investors boosted their holdings of the nation’s stocks and bonds to record levels, seeking to profit from the expanding economy and rising interest rates. Foreign ownership of bonds and equities reached all-time highs of $12.2 billion and $77.2 billion, respectively, on March 30, according to data released by the Securities and Exchange Board of India. India’s economic growth is “impressive” and may accelerate to as high as 8.75 percent in the fiscal year that began April 1, from an estimated 7.2 percent in the last 12 months, Finance Minister Pranab Mukherjee said April 2. “The rupee has recently broken through key resistances and looks set to appreciate as capital inflows remain heavy,” said Vikas Babu, a Mumbai-based foreign-exchange trader at state- owned Andhra Bank. “Growth is strengthening and India is also ahead of most economies in the interest-rate cycle. Economic data is improving across the world, boosting risk appetite.” The rupee climbed 0.3 percent to 44.77 per dollar as of 10:03 a.m. in Mumbai, according to data compiled by Bloomberg. The currency has appreciated 3.9 percent this year, Asia’s best performance after Malaysia’s ringgit. It touched 44.71 today, the highest level since Sept. 8, 2008. India’s foreign-exchange and debt markets were shut April 1 and 2 for holidays. Offshore contracts indicate bets the rupee will trade at 44.83 to the dollar in a month, compared with expectations of 44.97 on March 31. 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. The Reserve Bank of India raised its benchmark interest rate by 0.25 percentage point to 3.5 percent on March 19, the first such move since 2008. The central bank will review interest rates again on April 20. The yield on the nation’s benchmark 10-year bonds climbed 24 basis points in the last three months, a fifth quarterly increase. A basis point is 0.01 percentage point. --Editor: James Regan %INR RBI@IN To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net. To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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