India’s rupee rose to a seven-month high as overseas funds added to their biggest monthly investment in the nation’s stocks since October 2007. The currency gained against the dollar for the fifth time in six days on optimism signs the global recession is abating will boost investor appetite in emerging-market assets. India’s Bombay Stock Exchange Sensitive Index of shares has jumped 53 percent so far this quarter. “The rupee is keeping a bias to appreciate as equities look good and capital inflows continue to impress,” said Roy Paul, assistant manager of treasury at Federal Bank Ltd. in Mumbai. The rupee strengthened as much as 0.5 percent to 46.775 per dollar, the highest level since Nov. 5 and traded at 46.782 as of 10 a.m. in Mumbai, according to data compiled by Bloomberg. The currency is up 8.4 percent this quarter, the third-best performance among the 10 most-traded Asian currencies. Offshore contracts indicate bets the rupee will trade at 46.94 to the dollar in a month, compared with expectations of 47.17 yesterday. 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. Rupee-Yuan Trade The MSCI Asia Pacific Index of regional shares rose 1 percent today. Funds based abroad bought $132 million more Indian equities than they sold on June 1, adding to the $4.25 billion invested in May, data from the Securities and Exchange Board of India showed. The rupee will rise from an 18-month high versus the yuan as the South Asian nation’s limited reliance on exports helps it weather the global economic slump, Standard Chartered Plc said. The Indian currency climbed 6.2 percent against the yuan in May, the biggest monthly gain in at least a decade, as India’s trade deficit narrowed by 49 percent since November, while China’s surplus fell by 67 percent. Exports are equivalent to 15 percent of the Indian economy, compared with more than 60 percent in China. “China’s export dependence is far greater than India’s and policy makers are expected to keep the yuan stable” to protect local manufacturers, Priyanka Chakravarty, a strategist at Standard Chartered in Mumbai, said in an interview. “In India, the shrinking trade deficit has been supporting the currency.” The rupee gained 0.7 percent this week to 6.861 per yuan and has risen 11 percent from a record low of 7.628 on March 3, partly driven by the victory of India’s ruling Congress party in May elections. Standard Chartered forecasts the rupee will climb 4 percent to 6.63 by the end of the year. China’s trade surplus fell to $13.1 billion in April from an all-time high of $40.1 billion in November, government data show. India’s trade deficit shrank to $5 billion from $9.8 billion in the same period.

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