Back
30 Sep 2013
Rupee continues to strengthen on Fed liquidity and Rajan reforms
FXstreet.com (London) - Steps put in place by new Reserve Bank of India Governor Raghuram Rajan as well as continued Fed stimulus have helped spur the Indian Rupee onto its strongest month in a year – bucking the bearish Rupee trend.
The Rupee has steadily slid from INR68.61 on 4 September to a current rate of 62.8050 – dropping 0.4 percent in today’s trading thanks to US government shutdown fears.
The Rupee had been steadily driven up to INR68 levels on fears that the US Federal Reserve would be tapering its USD85bn monthly asset purchase programme. But with the Fed announcing on 18 September that it would be maintaining current bond purchase levels, the Rupee has strengthened almost 10 percent this month.
The Indian currency has been aided by the so-called “Rajan Bounce” as the new central bank governor takes steps to liberalise come of the currency controls put in place by his predecessor, Duvvuri Subbarao including opening the dollar swap window on NRI deposits and increasing the allowed bank exposure to foreign debt.
The downside of some of the policies may appear tomorrow, when it is expected that India will report a current account increase on the last quarter.
The Rupee has steadily slid from INR68.61 on 4 September to a current rate of 62.8050 – dropping 0.4 percent in today’s trading thanks to US government shutdown fears.
The Rupee had been steadily driven up to INR68 levels on fears that the US Federal Reserve would be tapering its USD85bn monthly asset purchase programme. But with the Fed announcing on 18 September that it would be maintaining current bond purchase levels, the Rupee has strengthened almost 10 percent this month.
The Indian currency has been aided by the so-called “Rajan Bounce” as the new central bank governor takes steps to liberalise come of the currency controls put in place by his predecessor, Duvvuri Subbarao including opening the dollar swap window on NRI deposits and increasing the allowed bank exposure to foreign debt.
The downside of some of the policies may appear tomorrow, when it is expected that India will report a current account increase on the last quarter.