Rupee completes best week in 13 years

Rupee completes best week in 13 years
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First Published: Sat, May 23 2009. 12 54 AM IST

The rupee completed the biggest weekly advance in 13 years on optimism Prime Minister Manmohan Singh, armed with a fresh mandate, will revive efforts to sell state assets and attract foreign investment.
The currency climbed to a five-month high as the benchmark stock index this week rallied the most since 1992. Singh, the first premier to win re-election after serving a full term since 1971, has the backing of 322 lawmakers and doesn’t need the support of communists who had previously blocked economic reforms.
“The new administration, sworn in on Friday, raises the prospect of a stronger growth outlook, economic reforms and a more prudent fiscal policy,” Stewart Newnham, Morgan Stanley’s Hong Kong-based currency strategist, wrote in a research note. “The improved economic prospects change our rupee outlook to positive.”
The rupee strengthened 4.9% this week, the most since March 1996, to 47.125 per dollar at the 5pm close in Mumbai, according to Bloomberg data. The rally took gains this month to 6.5%, the best performance among the 10 most-active Asian currencies.
The currency may rise to 46 by the end of the year, according to Newnham. The nation will sell stakes in firms as promised by the Congress party in its election manifesto, former finance minister P. Chidambaram said on 18 May.
The new administration may start by resuming share sale plans for electricity producer NHPC Ltd, explorer Oil India Ltd and fuel retailer Hindustan Petroleum Corp. Ltd, according to Mumbai-based brokerage Religare Capital Markets Ltd.
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First Published: Sat, May 23 2009. 12 54 AM IST
More Topics: Rupee | RBI | Sensex | Manmohan Singh | Election |