Rupee Rallies the Most in 11 Months after BJP Clinches Majority Seats


Rupee Rallies the Most in 11 Months after BJP Clinches Majority SeatsThe Indian rupee surged the most in 11 months, continuing it with its 2.1 percent advance last week after the main opposition party won the elections with more than enough majority, boosting investor confidence.

The rupee surged 0.5 percent to 58.4975 a dollar in mid-morning trade in Mumbai. It rose to a session-high of 58.4750, the highest level since June 18. Last week, the currency had earlier advanced the most in a week since September.

The opposition Bharatiya Janata Party clinched 282 of the 543 seats in the parliament, which was more than the required majority of 272 seats, reported the Election Commission. The poll results was the first time a single party had won the majority seats since 1984, fuelling optimism that the incoming government will fast-track economic growth without the burden of divisive coalition politics, reported Bloomberg News.


“The election result was clearly better than we expected,” said Craig Chan, the head of currency strategy at Nomura Holdings for Asia ex-Japan in Singapore. “The outlook for reforms, potential foreign inflows and growth prospects will be even more positive now.”

Most analysts expect the currency to rally to 55 a dollar to 57 per dollar by the end of this year. However, further rises in the currency will be limited by dollar demand from the central bank and oil importers. There are also fears that a stronger rupee may hurt the country’s exports.

The rupee’s one-month implied volatility, which measures the expected shifts in the exchange rate used to assign prices to options, declined 0.31 percentage point, or 31 basis points, to 8.34 percent, the weakest since March 17. To register for a free 2-week subscription to ForexMinute Premium Plan, visit

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