India’s Rupee Gains for Second Day as Dollar Supply Seen Rising

India’s rupee rose to a one-week high on speculation dollar supply will increase as exporters repatriate overseas income before the March 31 financial year-end, offsetting demand for the greenback from importers.

The rupee gained 0.1 percent from Feb. 21 to 62.065 per dollar in Mumbai, prices from local banks compiled by Bloomberg show. It rose as high as 61.95 earlier, the highest level since Feb. 17. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, slid 22 basis points, or 0.22 percentage point, to 8.02 percent, according to data compiled by Bloomberg.

Andhra Bank sees the rupee trading around current levels as sales of the greenback by companies including software exporters counter purchases by oil firms. International Monetary Fund Managing Director Christine Lagarde said yesterday U.S. stimulus cuts will cause further ructions in markets. She spoke in an interview following a meeting of Group-of-20 finance chiefs in Sydney.

“The rupee will stay rangebound unless there are some massive global or local cues,” said Vikas Babu, a trader at Andhra Bank in Mumbai. “There was nothing surprising from the G20 summit.”

Janet Yellen, in her first global forum as Federal Reserve chair, won praise for helping smooth emerging-market concerns as the Group of 20 pledged to be mindful of international repercussions of monetary policy. At separate interviews at the meeting, Indian central bank Governor Raghuram Rajan warned that inflation remained the biggest threat to the nation’s growth, diverging from Finance Minister Palaniappan Chidambaram, who highlighted diminishing price pressures.

Three-month offshore non-deliverable forwards rose 0.1 percent to 63.12 per dollar, data compiled by Bloomberg show. 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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