Rupee may surge 35% to 40 per dollar if Modi becomes Prime Minister, Citigroups Adam Gilmour says Mar 20, 2014, 12.42AM IST Bloomberg A victory for the Bharatiya Janata Party in next months general elections is seen powering the rupee to highs last reached in 2008. Polls show the BJP, which has projected Narendra Modi as its prime ministerial candidate, is poised to oust the incumbent Congress party, a result that would be a catalyst for a long- term advance in the rupee toward 40 to 45 per dollar, from 61.19 on March 14, according to Adam Gilmour, Citigroups head of Asia-Pacific currency and derivatives sales. A weak coalition would be the worst- case outcome, he said, and might send the currency sliding beyond Augusts record low of 68.83. The market view is that if Modi gets in, it will be a game- changer, Gilmour said in an interview. We always take politics with a pinch of salt, with the rare exceptions like India, where its going to really make a difference. The rupee lost about 28% of its value from the end of 2010 through last year, making it the worst performer among 12 Asian currencies tracked by Bloomberg. The declines reversed when India raised import tariffs on gold, helping narrow the shortfall in the broadest measure of trade to a four-year low, and RBI governor Raghuram Rajan increased interest rates to curb Asias fastest inflation. The rupee has rebounded about 13% from its August 28, 2013 record, and remained little changed even during the rout in emerging- market assets earlier this year. A jump in the rupee to as high as 40 per dollar would represent a 35% rally in Indias currency from the end of last week, and send it to the strongest level since April 2008. Gilmours prediction, for which he didnt give a timeframe, is 5 rupees higher than the most bullish forecaster in a Bloomberg survey of more than 30 strategists, whose median estimate foresees the currency at 63 on December 31 and at 58.50 by the end of 2016. m.timesofindia/lok-sabha-elections-2014/news/Rupee-may-surge-35-to-40-per-dollar-if-Modi-becomes-Prime-Minister-Citigroups-Adam-Gilmour-says/articleshow/32319371.cms?utm_source=facebook&utm_medium=referral
Posted on: Sat, 22 Mar 2014 13:25:09 +0000
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