BLBG: Indian Rupee Rises to 5-Week High as China Eases Yuan Controls
By Anil Varma
June 21 (Bloomberg) -- India’s rupee gained the most this month on optimism local exporters will benefit from an easing of China’s exchange-rate policy.
The currency appreciated for a fourth day, the longest winning streak since March, after the People’s Bank of China said on June 19 it will allow more movement in the yuan. The rupee also rose as the Bombay Stock Exchange’s Sensitive Index climbed as much as 1.4 percent.
“The rupee will keep its bias to appreciate as China prepares to ease restrictions on the yuan,” said Roy Paul, deputy general manager at Federal Bank Ltd. in Mumbai. “A stronger yuan would be a boost to Asian exports.”
The rupee advanced 1.2 percent to 45.63 per dollar as of 9:50 a.m. in Mumbai, according to data compiled by Bloomberg. It rose as high as 45.575 earlier, the strongest level since May 18.
Offshore forwards indicated the Indian currency will trade at 46.01 to the dollar in three months, compared with expectations of 46.67 at the end of last week. Forwards are agreements to buy or sell assets at a set price and date. Non- deliverable contracts are settled in dollars.
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