India’s rupee advanced the most in almost a week as prospects the U.S. central bank will ease monetary policy boosted the outlook for inflows into the nation’s higher-yielding assets.
Foreign funds poured $10 billion into local equities and bonds this year and have been net buyers every day this month, exchange data show. India’s 10-year government notes yield 659 basis points, or 6.59 percentage points, more than similar-maturity U.S. debt. Federal Reserve Chairman Ben S. Bernanke said yesterday he is prepared to “take further action” to stimulate the world’s biggest economy.
“The U.S. comments have helped boost investor confidence on global growth,” said Vikas Babu, a currency trader at state-run Andhra Bank in Mumbai. “With global macroeconomics improving, India stands to benefit substantially.”
The rupee advanced 0.7 percent to 55.1350 per dollar in Mumbai, according to data compiled by Bloomberg.
Three-month offshore non-deliverable forwards contracts traded at 56 a dollar, compared with 56.30 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.