Nov. 22 (Bloomberg) -- India’s rupee fell, approaching a two-month low before the government seeks lawmakers’ approval for policy changes announced this quarter in the winter session of parliament that started today.
Prime Minister Manmohan Singh needs legislators’ support for plans to allow more foreign investment in pension and insurance industries. Singh today survived a bid to oust his government over its decision to allow foreign companies to open supermarkets in the country.
Fluctuations in the rupee will be “contingent upon further reforms, implementation of announced reforms and the broad Dollar Index,” strategists at Citigroup Inc., including Singapore-based Gaurav Garg, wrote in a report received today. “With the ruling coalition reduced to minority status in both houses of parliament, the market is suspicious of the outcome.”
The rupee declined 0.2 percent to 55.2100 per dollar in Mumbai, according to data compiled by Bloomberg. It touched 55.2750 earlier, the lowest level since yesterday’s 55.3750 that was the weakest since Sept. 13 when the government began announcing measures to improve public finances and attract investment.
One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 9.75 percent.
The rupee rose earlier after U.S. data added to speculation a recovery in the world’s largest economy is gathering momentum. Jobless claims fell by 41,000 to 410,000 last week, Labor Department data showed yesterday.
Three-month onshore rupee forwards were at 56.11 per dollar, compared with 55.99 yesterday, according to data compiled by Bloomberg. Offshore non-deliverable contracts were at 56.12 versus 55.98. 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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