The India’s rupee jumped to its highest level in two weeks while government bonds rose after the Federal Reserve indicated that it is not in a hurry to hike interest rates, lowering the risk of investor flight from emerging markets.
The rupee rose 0.3 percent to 62.5175 per dollar at the close of trading in Mumbai. It had earlier advanced to 62.6727, its strongest level since March 5. The rupee has gained 0.8 percent in 2015; making it Asia’s best performing currency.
“The markets are drawing comfort from the fact that the Fed rate hikes are not happening anytime soon,” N.S. Venkatesh, the head of treasury at IDBI Bank Ltd in Mumbai, told Bloomberg News. “India remains a bright spot when the world is struggling.”
Foreign investors have invested $11.6 billion worth of local equities and debt so far since January 2015. The yield on sovereign rupee-denominated bonds that mature in July 2024 plunged three basis points to 7.76 percent.
The Fed’s stance also saw the South Korea’s won surge the most in at least three years. The won rose 1.1 percent to steady at 1,117.24 per dollar in Seoul close. The currency had earlier advanced by up to 1.7 percent, the most since November 2011. The Indonesia’s rupiah rallied 0.9 percent, its strongest gain since Oct. 17, to 13,045 against the U.S. currency.
The Taiwan’s dollar advanced 0.5 percent to close at 31.50, while the Chinese yuan recorded its strongest three-day surge since 2007. The yuan appreciated 0.53 percent to trade at 6.1961 per dollar in Shanghai, bringing its total gain over the past three days to 1.06 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com