Modi Effect: Rupee Best Performing Asia-Pacific Currency In 2014


NEW DELHI: Boosted by capital inflows and euphoria around the incoming government, rupee's surge to 11-month high levels has made it the best performing currency in Asia-Pacific region against the U.S. dollar so far in 2014.

With a gain of about 5.3 per cent since the start of this year, rupee has sprinted ahead of its other Asia-Pacific peers, including Indonesia's rupiah and New Zealand dollar, in terms of year-to-date rise, shows an analysis of various currencies vis-a-vis the Greenback.

The rupee, which closed at 58.52 levels against the U.S. dollar on the last trading day on Friday, has incidentally seen a lion's share of 5.3 per cent gain in the past one month.

The Indian currency stood at Rs 61.8 level per U.S. dollar at the start of 2014 and has recorded a gain of 327 paise in less than six months, partly helped by robust foreign fund inflows. This marks a major turnaround since August last year when rupee touched its lifetime low of 68.80.

"Positive sentiments out of the election results enabled us to upgrade our FII flows estimates by $5 billion to $20 billion, implying an overall BOP (balance of payment) surplus of $29 billion. We expect the dollar/rupee range to be 57-61 in FY2015," said Indranil Pan, chief economist of Kotak Mahindra Bank, in a report.

Under the leadership of its prime ministerial candidate Narendra Modi, BJP has recorded an unprecedented victory in the recently held Lok Sabha elections and the Gujarat strongman will be sworn in as Prime Minister on May 26.

Source: PTI