Rupee Gains Nearly 1.5% in Two Weeks as Foreign Money Returns After US Midterms

The Indian rupee has staged a sharp recovery over the past fortnight. It strengthened from ₹95.26 per US dollar on 29 October to about ₹93.85 on 9 November — a gain of close to 1.5% in less than two weeks, Business Today reported.

The currency had been under strain for months, and the Reserve Bank of India had stepped into the foreign exchange market to limit swings.

The midterm link

The report ties part of the turnaround to the US midterm elections, in which President Donald Trump’s Republican Party suffered setbacks. After the results, Trump reportedly ruled out new military strikes on Iran, which calmed fears of a wider war in West Asia. Brent crude, which had been above $105 a barrel before the results, eased to $96.41 by 9 November.

Foreign money flows back

• Foreign investors reportedly put more than $4 billion into Indian shares in the previous week.
• Citing Clearing Corporation of India data via PTI, foreign holdings of government bonds under the Fully Accessible Route rose by about ₹7,969 crore between 2 and 9 November, from ₹3.57 lakh crore to ₹3.65 lakh crore.
• The 10-year government bond yield fell from 7.315% to 7.178% over the same period.

Levels to watch

Currency traders are tracking the ₹93.50 mark. Some market participants see scope for a move towards ₹92.80 if inflows continue and oil stays soft. The report also notes that the midterms are only one factor: global risk appetite and interest-rate expectations matter too, and upcoming US inflation data and Federal Reserve decisions could change the picture.

Featured image: One Rupee Indian coins by Reserve Bank of India / Kshitij Gupta, CC BY-SA 3.0, via Wikimedia Commons.

Sources

• Trump loses, rupee gains: How US midterm elections triggered a turnaround — Business Today