Indian rupee forwards dropped the most in a month after the government raised the fiscal-deficit estimate in its federal budget on Saturday. Finance Minister Arun Jaitley forecast a shortfall equivalent to 3.9 percent of gross domestic product for the financial year starting April 1, the smallest since 2008 though higher than a previous goal of 3.6 percent. India’s stock-index futures rallied in Singapore after the nation’s top investors lauded a government pledge to boost infrastructure spending.
One-month offshore non-deliverable rupee forwards fell 0.6 percent to 62.26 a dollar as of 8:05 a.m. in Mumbai, data compiled by Bloomberg show. In the spot market, the rupee closed at 61.8450 on Friday, having risen 2 percent in 2015, the most in Asia.
“Overall, we aren’t convinced this budget has delivered the ‘shock and awe’ that was probably needed to deliver the next leg higher in the rupee,” Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore, wrote in a report. “At the same time though, we would note that the budget is unlikely to change the more positive trend for the rupee over the coming few months.”
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