It may be rupee’s turn to vault on to currency podium

MUMBAI: With Urjit Patel set to become the Governor of the Reserve bank of India, the Indian rupee is likely to outperform most of its peers from the emerging market lot when it comes to total investment returns that include spot exchange rate and interest income.

According to Bloomberg data, overseas investors could earn a total forecasted return of 2.03% in the rupee-dollar pair by March end next year, compared with 0.30% in the Chinese yuan and 0.97% in the Brazilian real.

The rupee, pegged against the greenback, is ranked fifth-best performing while the Russian ruble is holding the top rank. But, improving domestic macroeconomic fundamentals stand India in a good stead compared to other emerging economies.

Yield tourists find India a logical destination, which offers both relative safety and higher rates at a time when more than $13-trillion dollar worth of bonds are yielding negative returns amid contracting global economies.

With a stable currency, many foreign portfolio investors are seen not hedging their India exposure. Thus, they are able to enhance investment gains by eliminating the hedging costs.