The Indian Rupee to US Dollar (INR/USD) exchange rate continued to rally and reached its best level in eight months as risk sentiment continued to improve and as optimism rises over the strength of the Indian economy.
The upward momentum of the Rupee now means that the currency is on track to make its best quarterly performance since 2012 and shows that it has successfully managed to shake off the record low it plummeted to last year.
Optimism for a new government has been one of the major causes for the Rupees rise as economists expect a new regime will be able to hasten the world’s largest democracy’s economic recovery. An easing in inflation earlier in the year has also eased some of the downward pressure onto the Rupee and economists are now forecasting that economic growth will increase from a decade low as budget and current account deficits shrink.
As with other perceived riskier assets the Rupee has benefited from an increase in risk sentiment as tensions between the West and Russia seem to have eased and as expectations rise that Chinese authorities could introduce monetary stimulus measures into the world’s second largest economy following a run of disappointing data releases.
“It’s been a good quarter for the Rupee as economic fundamentals have improved. I don’t see the currency gaining much more before the elections as there’s uncertainty if the polls will deliver a clear mandate to either political contender,” said a strategist at Commonwealth Bank of Australia.
The Indian general election is spread over six weeks of voting with the final result being revealed in Mid-May.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,99.5345,
Euro,,Indian Rupee,82.2564 ,
US Dollar,,Indian Rupee,59.9100 ,
Australian Dollar,,Indian Rupee,55.4445 ,
[/table]
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