India’s rupee headed for a fourth weekly gain on optimism the central bank’s efforts to boost the supply of dollars will ease concerns about financing the nation’s current-account deficit.
Reserve Bank of India Governor Raghuram Rajan this month allowed banks to borrow more from abroad and offered to swap the funds, along with dollars raised through deposits from citizens living overseas, at concessional rates. The shortfall in the broadest measure of trade will narrow to 3.2 percent of gross domestic product in the year through March 2014 from a record 4.8 percent in the prior period, according to Religare Capital Markets Ltd.
The rupee gained 0.6 percent this week and 0.2 percent today to 61.93 per dollar as of 10:05 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. The currency’s 6.1 percent advance in September is the best performance among Asia’s 11 most-traded currencies. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 247 basis points, or 2.47 percentage points, since Sept. 20 to 14.97 percent.
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