Reuters logo
Expect rupee to test 57 per dlr in three months: JP Morgan
May 23, 2014 / 6:48 AM / 4 years ago

Expect rupee to test 57 per dlr in three months: JP Morgan

Reuters Market Eye - J.P.Morgan expects USD/INR to test 57 per dollar in the next three months as Narendra Modi’s sweeping electoral victory “is a more transformational outcome for India macro than most could have imagined” and will thus attract foreign inflows.

A private money trader counts Indian Rupee currency notes at a shop in Mumbai August 1, 2013. REUTERS/Vivek Prakash/Files

The bank adds it expects Modi to fight inflation through administrative measures, and the focus on the RBI should reduce.

As a result, J.P.Morgan recommends receiving 5-year OIS expecting the rate to fall 25-50 bps, inverting the swap curve further.

However, J.P.Morgan warns that higher borrowing from the new government could hurt longer-tenure bonds and recommends investors stick to the 5-year government bonds for carry.

Reporting by Neha Dasgupta

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below