India’s national currency Rupee rose to its highest on Tuesday (12 March) in the last two-and-a-half months, carried by strong foreign inflows into the equities market on the expectation of PM Narendra Modi’s re-election in May, reports Reuters.
It should be noted that the appreciation in the value of rupee in the forex market was bolstered by the absence of Reserve Bank of India’s (RBI) intervention.
The rupee rose to its highest level of 69.56 per US dollar, its most robust performance since 2 January (2019). India's national currency was also more stable by 0.47 per cent than Monday’s close of 69.89.
PM Modi Magic?
Foreign inflows into Indian stock markets have shown an upward trend after the improved probability of Prime Minister Narendra Modi’s return to power for a second term in the coming general elections.
This improved popularity of the prime minister follows India’s military strike on JeM terrorist camps deep inside Pakistan in response to a terrorist suicide attack in Kashmir which killed 44 CRPF jawans on 14 February (2019).
“Typically, the rupee rises in March due to seasonal factors. But this time, the Modi factor is also getting quite a bit of inflows,” said a forex dealer.
It was earlier reported that according to an opinion poll conducted by Times Now and VMR, Prime Minister Narendra Modi’s popularity among the electorate jumped seven per cent in the aftermath of the Pulwama attack.
Also Read: Modi Wave 2.0?