India Rupee Gains Most in a Week as Dollar Drops on Fed MinutesNupur Acharya
India’s rupee rose the most in a week as signs the Federal Reserve will delay raising interest rates boosted demand for emerging-market assets.
The rupee gained 0.3 percent to end at 63.64 a dollar in Mumbai, prices from local banks compiled by Bloomberg show. That’s the biggest advance in the currency since May 14.
The dollar fell against its major peers for the first time in four days after minutes of the Fed’s April meeting released Wednesday signaled officials are unlikely to raise rates in June. Citigroup Inc. said in a note it expects the rupee to stabilize in the 63.50 to 64.50 range versus the greenback, with the central bank intervening in the event it breaches 65.
“Expectations of a rate increase by the Fed have been pushed back,” said Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, outside New Delhi. “The dollar index too has come off, helping the rupee.”
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell 0.2 percent on Thursday.
The rupee tumbled to an unprecedented 68.8450 a dollar in August 2013 after the Fed’s signal to withdraw its monetary stimulus saw an exodus of funds from emerging markets. U.S. rates will probably be increased in September, according to the median forecast in a Bloomberg survey of economists.
The yield on the 8.4 percent Indian notes due July 2024 rose 2 basis points, or 0.02 percentage points, to 7.88 percent, according to prices from the Reserve Bank of India’s trading system. India will sell 160 billion rupees of bonds on Friday, including 90 billion rupees of a new 10-year note.