BEARISH BETS ON ` AT 5- YR HIGH, SHOWS POLL

Bengaluru, Sept. 6: Bearish bets that the rupee will weaken rose to their highest level in five years over the past two weeks, a Reuters poll showed, as the unit hit fresh lows, while most emerging currencies reeled from dollar strength and trade tensions.

With the index measuring the US dollar against a basket of currencies up more than 3 per cent this year, though slightly weaker on Thursday, investors in emerging Asian units were spooked by tensions around global trade conflicts and fears of contagion from Argentina and Turkey.

Appetites for risky assets were further reduced by South Africa’s economy also slipping into recession.

“With growing concerns about Emerging Market ( EM) contagion, risk appetite for Asian assets may remain very selective in the nearterm,” OCBC Bank in Singapore said in a note.

Traders say the RBI has intervened multiple times to put a floor under the sliding rupee.

On Thursday, however, the rupee breached a psychologically important mark of 72.00 for the first time on lack of supply of dollars in the forex market.

Concerns over India’s trade deficit and inflation, due to high oil and commodity prices, have prompted several foreign investors to exit long positions in the rupee, which is Asia’s worst performing currency this year, weakening more than 12 percent against the dollar.

Worries over some economic fundamentals have also caused investors to cut their long positions in the Indonesian rupiah.

Bearish bets on the rupiah piled up in the past two weeks and reached their highest since September 2015, the poll of 11 respondents showed. —