In­dia's ru­pee slides most in three weeks

The Pak Banker - - MARKETS/SPORTS -

In­dia's ru­pee halted a six-day ad­vance on spec­u­la­tion some in­vestors judged the cur­rency's gains to be ex­ces­sive.

The ru­pee dropped 0.4 per­cent to 67.3325 a dol­lar as of 11:57 a.m. in Mum­bai, set for its big­gest de­cline since Feb. 16, prices from lo­cal banks com­piled by Bloomberg show. The dol­lar's 14-day rel­a­tive-strength in­dex ver­sus the ru­pee was at 33.6 on Fri­day, near the 30 level that in­di­cates to some traders a re­ver­sal is likely. In­dian mar­kets were shut Mon­day for a lo­cal hol­i­day.

"We saw an ex­tended rally and some de­pre­ci­a­tion was re­quired," said Gau­rav Sharma, a se­nior cur­rency an­a­lyst at Reli­gare Com­modi­ties Ltd. in Noida, near New Delhi. He pre­dicts the ru­pee in a 6767.50 a dol­lar range for the day.

The In­dian cur­rency jumped 2.4 per­cent in the last six days and rose to a seven-week high of 67.0850 on Fri­day as for­eign funds boosted hold­ings of lo­cal stocks amid a re­vival in global sen­ti­ment for eq­ui­ties. The in­flows fol­lowed Feb. 29 bud­get an­nounce­ments by Fi­nance Min­is­ter Arun Jait­ley, in­clud­ing re­tain­ing the govern­ment's goal of nar­row­ing the fis­cal deficit to a nine-year low and boost­ing spend­ing on roads, ports, power plants and other pub­lic projects.

Sov­er­eign bonds rose, with the 10year yield drop­ping one ba­sis point to 7.62 per­cent, ac­cord­ing to prices from the Re­serve Bank of In­dia's trad­ing sys­tem. It slipped 15 ba­sis points last week. In­dia plans to auc­tion 46.81 bil­lion ru­pees ($695 mil­lion) of govern­ment debt quo­tas to for­eign in­vestors af­ter the close of mar­kets.

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