Rupee gains, stocks rally as govt may plan steps to rescue the currency

India’s rupee jumped the most in three weeks and stocks rallied after an official said the government may announce measures to support the currency after a planned review of the economy by Prime Minister Narendra Modi this weekend.

The measures will probably include steps to curb the decline in the rupee and oil prices, the official told reporters in New Delhi, asking not to be identified citing rules. The rupee has slumped to a succession of record lows in the past three months amid a selloff in emerging markets and concern about India’s current-account deficit.

“The market is seeing a temporary relief and moving on hope,” Sajal Gupta, head of foreign-exchange and rates at Edelweiss Securities in Mumbai. “Market players will now be keenly watching the government moves. If the moves are credible, we’ll see the rally continuing, and if the moves not credible, we’ll see the pain return very swiftly.”

The rupee strengthened as much as 0.6 percent to 72.2650 per dollar after sliding to an all-time low of 72.9138 in earlier trading. The benchmark S&P BSE Sensex Index climbed 0.6 percent, while benchmark 10-year bond yields climbed two basis points to 8.20 percent.