Top Rupee Analyst Says Buy After Best Budget-Day Gain Since 2010

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The Indian rupee’s advance following the government’s federal budget on Wednesday is spurring bets for more gains.

Scotiabank, which had the most accurate rupee estimates in Bloomberg’s quarterly rankings, recommends buying the Indian currency against the dollar with a target of 66.50, saying that the pro-growth and fiscally prudent budget should buoy investor confidence. The rupee remains a “prominent long position” in Nomura Holdings Inc.’s Asia foreign-exchange relative value portfolio, it said in a report Thursday.

The rupee jumped 0.6 percent on Wednesday, the most since May and its best performance on any budget day since 2010 excluding 2015 when the event fell on a Saturday. The currency was little changed at 67.49 per dollar in Mumbai Thursday.

Read: Modi to Spend More on India’s Villages With Eye on Polls

“The budget with fiscal consolidation remaining on track is likely to prompt a policy rate cut by the Reserve Bank of India on Feb. 8,” Qi Gao, a Singapore-based foreign-exchange strategist at Scotiabank, wrote in a report Thursday. An accommodative monetary policy and market hopes for further reforms are among reasons that would attract portfolio investment inflows, he wrote.

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