India’s Rupee Rises to One-Week High on Equity Inflow Optimism

India’s rupee advanced to a one-week high after foreign investors pumped money into the nation’s shares amid speculation the U.S. will maintain record stimulus that has buoyed emerging-market assets.

Overseas investors bought $992 million more local stocks than they sold this month, according to exchange data. Jobless claims in the world’s largest economy probably increased last week, according to a Bloomberg survey before data due today, and consumer confidence dropped to a seven-month low in November, a report showed yesterday. That bolsters the case for the Federal Reserve to keep buying $85 billion of bonds each month.

The rupee rose 0.6 percent to 62.1550 per dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It touched 62.15 earlier, its strongest level since Nov. 19.

“The rupee is being driven by the demand-supply scenario and this will continue until the end of this month,” said Naveen Raghuvanshi, a trader at Development Credit Bank Ltd. in Mumbai, referring to the level of dollars in the domestic market. The rupee’s gains will be limited, and may even reverse, as oil importers buy the dollar to pay month-end bills, he said.

India’s gross domestic product increased 4.6 percent in the three months through September from a year earlier, compared with 4.4 percent in the previous quarter, according to the median estimate in a Bloomberg survey before data due Nov. 29.

One-month implied volatility in the rupee, a gauge of expected moves in the exchange rate used to price options, jumped 12 basis points, or 0.12 percentage point, to 11.74 percent.

Three-month offshore non-deliverable rupee forwards rose 0.2 percent to 63.82 per dollar, according to data compiled by Bloomberg. 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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