(Bloomberg) – India’s rupee is protected from the winds it typically has in August, thanks to strong foreign inflows in stock sales by the nation’s markers.
ICICI Bank Ltd., Axis Bank Ltd. and mortgage lender HDFC Ltd. have raised a combination of 350 billion rupees ($ 4.7 billion) this month. Founders of Bandhan Bank Ltd., India’s most profitable lender, sold 106 billion rupee shares to investors including BlackRock Inc. Along with smaller offerings from companies including Info Edge (India) Ltd. the inflow of shares in August reached $ 3.5 billion, the highest in Asia ancient China.
The fundraising and a weak dollar have meant that the rupee is stable in August this year, against an average decline of about 2.5% per month in the past decades. A seasonal pattern has weakened the currency this month in six of the past 10 years, though analysts are unable to pinpoint the exact cause.
“Rupee has been trading in a narrow range so far this month, with a weaker US dollar compensating for Rupee’s weak seasons,” said Khoon Goh, head of Asian research at Australia and New Zealand banking group in Singapore. Strong capital inflows during the month also help the cause of the rupee, he said.
The currency still remains in the lower rings of the Asian pack as the Reserve Bank of India continues to wake up with dollars. The nation’s foreign exchange reserves total $ 538 billion, thanks in large part to the RBI’s greenback purchases by the greenback.
Please visit us at bloomberg.com for more articles like this
Subscribe now to stay ahead with the most trusted business news source.
© 2020 Bloomberg LP
