Rupee Slump trips Fewer Alarms As Funds Say India Less Fragile
Global investors are keeping faith in India’s rupee bonds, even as the currency inches toward the record low reached in 2013, saying the nation’s finances have improved over the past two-and-a-half years. Western Asset Management Co., which manages about $450 billion, says it has “very large overweight exposure” to India’s currency and debt. Amundi Asset Management said the market will remain stable despite global volatility. While the rupee has slipped to within 1.8% of the unprecedented 68.8450 a dollar reached in August 2013, strategists surveyed by Bloomberg predict it will strengthen to 67 by March-end. Asia’s third-largest economy has been overhauled since the rout in 2013, when a record current-account deficit, soaring inflation and weak growth led Morgan Stanley to include the rupee in its list of “fragile five” currencies. Central bank governor Raghuram Rajan boosted India’s foreign reserves by the most among major developing economies, a slump in oil prices improved external finances and inflation halved. The World Bank predicts India’s growth this year will be the fastest among the world’s major economies.