The rupee VOLATILITY rose the HIGHEST in almost two months on the news that a U.S. economic recovery will prompt the Feds to further cut stimulus, potentially weakening India’s currency. One-month implied volatility, a gauge of expected moves in the xchange rate used to price options, rose 31 basis points, or 0.31 percentage point, to 8.87 percent as of this morning in Mumbai. That’s the biggest jump since Nov. 28.
The rupee fell 0.1 percent to 61.925 per dollar, according to prices from local banks compiled by Bloomberg. The currency dropped for a fourth day, the longest streak since Nov. 12. The RBI will review borrowing costs Jan. 28. Urjit Patel committee set up by the central bank yesterday proposed adopting a 4 percent consumer-price-inflation target by 2016 as part of a monetary-policy change, a shift that could lead to higher interest rates, if accepted.
Three-month offshore non-deliverable forwards fell 0.2 percent to 63.13 per dollar. Forward contracts are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.The outlook for rupee does not look that a good picture.
The rupee fell 0.1 percent to 61.925 per dollar, according to prices from local banks compiled by Bloomberg. The currency dropped for a fourth day, the longest streak since Nov. 12. The RBI will review borrowing costs Jan. 28. Urjit Patel committee set up by the central bank yesterday proposed adopting a 4 percent consumer-price-inflation target by 2016 as part of a monetary-policy change, a shift that could lead to higher interest rates, if accepted.
Three-month offshore non-deliverable forwards fell 0.2 percent to 63.13 per dollar. Forward contracts are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.The outlook for rupee does not look that a good picture.