India’s national currency has gone from being Asia’s worst performing currency to its best within a matter of five weeks as the chances of Prime Minister Narendra Modi’s reelection in May have increased, reports Bloomberg.
“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 dovish tilt by major central banks in the face of a faltering global expansion could also prompt foreigners to chase higher yields in emerging Asia, he added.
American multinational investment bank Goldman Sachs (GS) has also recently upgraded its view on India to overweight status on account of the increasing probability of Prime Minister Narendra Modi’s win in the upcoming general elections.
India will go to polls in a seven-phase manner spanning over two months and the results will be announced on 23 May 2019.
Investors are hoping that a second term for the NDA government headed by PM Modi will provide a stable government to the country capable of undertaking bolder economic reforms and more monetary policy easing.