India’s rupee declined the most in a week as the heightened risk of Greece’s exit from the euro spurred volatility and damped demand for emerging-market assets.
Sixty-one percent of Greeks voted against further spending cuts and tax increases in a July 5 referendum on bailout terms proposed by the nation’s creditors.
The S&P BSE Sensex index of Indian shares fell the most in three weeks and the rupee halted a four-session advance as a gauge of the U.S. dollar climbed. Sovereign bonds rose amid optimism India will allow global funds to buy more debt as authorities review investment limits.
“The risk-off sentiment has pushed the rupee and stocks lower,” said Paresh Nayar, the Mumbai-based head of currency and money markets at the local unit of South African lender FirstRand Ltd.
“Greece won’t be a constant concern for the Indian currency and domestic factors will soon prevail.” The rupee weakened 0.2 percent to 63.5750 a dollar as of 11:28 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg.
Its three-month implied volatility, a gauge of expected swings used to price options, climbed six basis points to 6.68 percent. Government bonds rose for a fifth day.
The yield on the notes due May 2025 fell two basis points to 7.78 percent, prices from the central bank’s trading system show.
The Reserve Bank of India and the nation’s markets regulator will discuss a plan to examine the cap on overseas holdings of government debt, central bank Governor Raghuram Rajan said last week.
Foreign institutional investors have almost exhausted the current $30 billion limit.
bloomberg.com
Sixty-one percent of Greeks voted against further spending cuts and tax increases in a July 5 referendum on bailout terms proposed by the nation’s creditors.
The S&P BSE Sensex index of Indian shares fell the most in three weeks and the rupee halted a four-session advance as a gauge of the U.S. dollar climbed. Sovereign bonds rose amid optimism India will allow global funds to buy more debt as authorities review investment limits.
“The risk-off sentiment has pushed the rupee and stocks lower,” said Paresh Nayar, the Mumbai-based head of currency and money markets at the local unit of South African lender FirstRand Ltd.
“Greece won’t be a constant concern for the Indian currency and domestic factors will soon prevail.” The rupee weakened 0.2 percent to 63.5750 a dollar as of 11:28 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg.
Its three-month implied volatility, a gauge of expected swings used to price options, climbed six basis points to 6.68 percent. Government bonds rose for a fifth day.
The yield on the notes due May 2025 fell two basis points to 7.78 percent, prices from the central bank’s trading system show.
The Reserve Bank of India and the nation’s markets regulator will discuss a plan to examine the cap on overseas holdings of government debt, central bank Governor Raghuram Rajan said last week.
Foreign institutional investors have almost exhausted the current $30 billion limit.
bloomberg.com
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