India’s rupee rose the most in more than a week after foreigners boosted holdings of local assets amid reviving economic growth and indications of progress toward a Russian-backed cease-fire with Ukraine.
Global funds have pumped almost $10 billion into the nation’s bonds and stocks this quarter, exchange data show. India’s gross domestic product increased 5.7 percent from a year earlier in the April-June period, the most since the first quarter of 2012, data showed on Aug. 29. The rupee extended gains today as reports showed Russia and Ukraine agreed on steps toward a cease-fire, according to JM Financial Services Ltd.
“The positive economic data spurred inflows and that supported the rupee,” said Vicky Sajnani, Mumbai-based associate vice president of commodities and currencies at JM Financial Services. “The news of cease-fire in Ukraine further contributed to the rupee’s strength.”
The Indian currency gained 0.3 percent to close at 60.4850 per dollar in Mumbai, prices from local banks compiled by Bloomberg show. That’s the biggest gain since Aug. 22. The rupee earlier gained as much as 0.6 percent in intraday trading.
Three-month implied volatility in India’s currency, a measure of expected exchange-rate swings used to price options, fell 24 basis points to 6.84 percent in Mumbai, according to data compiled by Bloomberg. That’s the lowest since July 30.
Three-month offshore non-deliverable forwards advanced 0.3 percent to 61.40 per dollar. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in the U.S. currency.
To contact the reporter on this story: Kartik Goyal in Mumbai at email@example.com