* Indian rupee hits 11-month high
* Rupee climbs after ruling party's key state election win
* Most Asian currencies steady ahead of Fed meeting
* Limited reaction to mixed Chinese economic data
(Adds text, updates prices)
By Masayuki Kitano
March 14 The Indian rupee hit an 11-month high
and outperformed other Asian currencies on Tuesday, after Prime
Minister Narendra Modi's landslide victory in a key battle
ground state bolstered hopes for more reforms.
The victory by Modi's ruling Bharatiya Janata Party in
India's most populous state of Uttar Pradesh strengthens his
claim to a second term in national elections in 2019, and
investors are betting it will embolden the ruling party to
embark on more reforms.
The rupee touched a high of 66.16 per U.S. dollar,
its strongest level since April 2016, while the broader NSE
stock index hit a record high as Indian markets reopened
after a public holiday on Monday and reacted to the state
election results announced over the weekend.
"The assembly election results in Uttar Pradesh may well
mark a key milestone for the Modi government in its bid to step
up reforms," Chang Wei Liang, FX strategist for Mizuho Bank
wrote in a note.
Most Asian currencies were little changed ahead of the U.S.
Federal Reserve's two-day meeting, starting later on Tuesday.
The Fed is widely expected to raise interest rates this
week, and one focus is whether Fed policymakers will revise up
their interest rate projections for this year in their so-called
"dot plot". In the previous projections released in December,
the Fed had signalled three interest rate hikes in 2017.
Some analysts are sceptical that the new projections will
point to a faster pace of rate hikes this year than what was
flagged in December, given uncertainty over the Trump
administration's fiscal policies and their impact.
"It's still a bit premature to upgrade their rate hike
projections," said Roy Teo, FX strategist for ABN AMRO Bank.
"I think more likely, what they will do is just to signal
that even without Trump policies the economy is doing well."
There was little reaction in Asian currencies to Chinese
economic data, which painted a mixed picture. China's factory
output and fixed-asset investment grew more strongly than
expected in the first two months of the year, while retail sales
The Singapore dollar held steady at 1.4145 per U.S.
ABN AMRO Bank's Teo estimates that the Singapore dollar's
nominal effective exchange rate (NEER) has recently been
hovering near the mid-point of the central bank's policy band.
Such moves seem consistent with the prevailing view among
analysts that the Monetary Authority of Singapore is likely to
keep its monetary policy unchanged at its April policy meeting,
Although inflation has been edging higher in Singapore, it
makes sense for the central bank to stand pat, rather than
tighten policy, given uncertainties such as how U.S. trade
policies might affect Asia, Teo said.
"We just saw some encouraging signs on inflation in
Singapore picking up but it's still relatively subdued," Teo
CURRENCIES VS U.S. DOLLAR
Change on the day at 0509 GMT
Currency Latest bid Previous Pct
Japan yen 114.84 114.87 +0.03
Sing dlr 1.4145 1.4139 -0.04
Taiwan dlr 30.930 30.916 -0.05
Korean won 1146.20 1144.40 -0.16
Baht 35.31 35.32 +0.03
Peso 50.345 50.325 -0.04
Rupiah 13357 13355 -0.01
Rupee 66.20 66.60 +0.60
Ringgit 4.4460 4.4450 -0.02
Yuan 6.9174 6.9165 -0.01
far in 2017
Currency Latest bid End prev Pct
Japan yen 114.84 117.07 +1.94
Sing dlr 1.4145 1.4490 +2.44
Taiwan dlr 30.930 32.279 +4.36
Korean won 1146.20 1207.70 +5.37
Baht 35.31 35.80 +1.41
Peso 50.35 49.72 -1.24
Rupiah 13357 13470 +0.85
Rupee 66.20 67.92 +2.60
Ringgit 4.4460 4.4845 +0.87
Yuan 6.9174 6.9467 +0.42
(Reporting by Masayuki Kitano in Singapore; Editing by