(Bloomberg) -- India’s rupee rose the most in a month and bonds advanced after Federal Reserve Chair Janet Yellen signaled an increase in U.S. interest rates isn’t imminent, supporting demand for emerging-market assets.
Yellen told the Senate Banking Committee on Tuesday that the Fed’s pledge to be “patient” on beginning to raise the benchmark rate means a move is unlikely for “at least the next couple” of meetings. A gauge of the dollar retreated for a second day.
India’s Finance Minister Arun Jaitley, who will present the federal budget on Feb. 28, is likely to unveil measures to boost foreign investment, according to DCB Bank Ltd.
“The rupee is reacting to Yellen’s comments, which implied that U.S. rate increases are still probably some time away,” said Navin Raghuvanshi, a currency trader at DCB Bank in Mumbai.
“There’s also some expectation of an investment-friendly budget, which is aiding sentiment.”
The rupee gained 0.4 percent to close at 61.9675 a dollar in Mumbai, the biggest advance since Jan. 23, according to prices from local banks compiled by Bloomberg. It touched 61.94 earlier, the strongest level since Feb. 10.
The currency has climbed 1.7 percent in 2015, the best performance in Asia, as global funds poured $8.4 billion into rupee-denominated debt and local stocks on speculation Prime Minister Narendra Modi’s government will take steps to spur investment and revive growth in Asia’s third-largest economy.
The yield on local sovereign bonds due July 2024 fell one basis point, or 0.01 percentage point, to 7.71 percent, prices from the Reserve Bank of India’s trading system show.
Three-month offshore non-deliverable rupee forwards climbed 0.6 percent to 62.90 a 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.
bloomberg.com
Yellen told the Senate Banking Committee on Tuesday that the Fed’s pledge to be “patient” on beginning to raise the benchmark rate means a move is unlikely for “at least the next couple” of meetings. A gauge of the dollar retreated for a second day.
India’s Finance Minister Arun Jaitley, who will present the federal budget on Feb. 28, is likely to unveil measures to boost foreign investment, according to DCB Bank Ltd.
“The rupee is reacting to Yellen’s comments, which implied that U.S. rate increases are still probably some time away,” said Navin Raghuvanshi, a currency trader at DCB Bank in Mumbai.
“There’s also some expectation of an investment-friendly budget, which is aiding sentiment.”
The rupee gained 0.4 percent to close at 61.9675 a dollar in Mumbai, the biggest advance since Jan. 23, according to prices from local banks compiled by Bloomberg. It touched 61.94 earlier, the strongest level since Feb. 10.
The currency has climbed 1.7 percent in 2015, the best performance in Asia, as global funds poured $8.4 billion into rupee-denominated debt and local stocks on speculation Prime Minister Narendra Modi’s government will take steps to spur investment and revive growth in Asia’s third-largest economy.
The yield on local sovereign bonds due July 2024 fell one basis point, or 0.01 percentage point, to 7.71 percent, prices from the Reserve Bank of India’s trading system show.
Three-month offshore non-deliverable rupee forwards climbed 0.6 percent to 62.90 a 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.
bloomberg.com
India's economy is turning a corner http://theforexcenter.blogspot.co.uk/
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