Rupee Completes Its Best Week Since March as Indian Stocks Surge

  • S&P BSE Sensex index of shares climbed 5.3 percent this week
  • Federal Reserve unlikely to increase rates in June: Religare

India’s rupee posted its biggest weekly advance since mid-March as local stocks jumped amid an emerging-markets rebound.

Global funds bought a net $182.6 million of Indian shares in the last two days, taking inflows for the week through Thursday to $58.9 million, data compiled by Bloomberg show. The S&P BSE Sensex index climbed 5.3 percent in its best week since March. Demand for developing-nation assets is picking up on speculation the Federal Reserve won’t raise interest rates next month. Futures show odds for an increase in June stand at 28 percent, down from 34 percent on Tuesday. Those for July are at 51 percent.

“The sharp upmove in stocks has helped the rupee,” said Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, near New Delhi. “On the Fed, we don’t expect all the talk to lead up to an actual increase in interest rates in June.”

The rupee strengthened 0.6 percent from May 20 and 0.2 percent on Friday to 67.0350 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. The weekly gain is the biggest since the period ended March 18.

The currency is still Asia’s worst performer this year, having weakened 1.3 percent. Religare’s Sharma expects it to trade in a range of 66.90-67.20 a dollar next week.

Government bonds rose this week, with the yield on notes due January 2026 falling one basis point from May 20 to 7.47 percent, according to the prices from the central bank’s trading system. It was steady on Friday.

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