A worker checks a 500 rupee note at a fuel station (Reuters)
A worker checks a 500 rupee note at a fuel station (Reuters)

Most bullish forecaster sees a big jump in rupee's value on Modi's return

  • Foreign inflows into local markets will get a boost if Modi secures a second term
  • Another rate cut by RBI in June policy will also help boost local equities and bonds: Analyst

India’s rupee is likely to outperform Asian peers to reach its highest level in a year as the prospect of Prime Minister Narendra Modi securing a second term lure more foreign inflows, the most bullish forecaster for the currency said.

The rupee may strengthen to 67 per dollar by end-June, a level last seen in the same month last year, said Qi Gao, a currency strategist at Scotiabank in Singapore. That compares with a median forecast of 70.13 in a Bloomberg survey. Another rate cut by the Reserve Bank of India in its June policy, will also help boost local equities and bonds, said Gao.

Rupee seen rising to 67/dollar by Scotiabank
Rupee seen rising to 67/dollar by Scotiabank

The rupee rallied the most since December on Monday as stocks hit a record high after exit polls signaled Modi’s return to power for a second term. Actual results will be known on Thursday, when the votes are counted. The rupee was little changed Tuesday at 69.77 per dollar.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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