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Rupee goes from Asia's worst to best currency as market sees Modi returning

Foreigners bought a net $3.3 billion of shares through March 18, accounting for more than half the $5.6 billion of inflows year-to-date, and raised holdings of bonds by $1.4 billion this month

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Rupee versus dollar. Photo: iStock

Kartik Goyal | Bloomberg
Asia’s worst-performing currency took five weeks to become its best.

The turnaround has been fueled by the improved chances of Prime Minister Narendra Modi winning a second term amid recent tensions between India and Pakistan. The optimism has led to local shares and debt luring robust flows, which have turned the carry-trade returns on the rupee to the highest in the world in the past month.

“The high-yielding rupee will likely advance further if Modi wins a second term,” said Gao Qi, a currency strategist at Scotiabank in Singapore, who expects the currency to rally to 67 per dollar by June-end. A

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First Published: Mar 20 2019 | 6:38 AM IST

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