Big Daddy Holds Sway Over Rupee Market Spurring Trader Angst
- Rupee swings are among lowest in emerging-market currencies
- Patel to be tested by outflows from deposits, Fed rate threat
Urjit Patel, governor of the Reserve Bank of India.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
Raghuram Rajan might be gone, but Big Daddy still reigns supreme in India’s currency market.
Big Daddy? That’s how traders in Mumbai refer to the central bank when it intervenes to curb rupee swings, a strategy used by former Governor Rajan that’s seen volatility dwindle to the lowest level among emerging-market currencies after the Chinese yuan and pegged Hong Kong dollar. Early signs are that new Governor Urjit Patel is just as committed to the cause, though he’s having to work harder to stabilize the rupee: India’s foreign-exchange reserves slumped by the most since 2013 in the first week of October, suggesting officials sold dollars to bolster the currency.