Indian rupee
Indian rupee Image Credit: Gulf News Archives

India’s rupee is likely to outperform Asian peers to reach its highest level in a year as the prospect of Prime Minister Narendra Modi securing a second term lure more foreign inflows, the most bullish forecaster for the currency said.

The rupee may strengthen to 67 per dollar by end-June, a level last seen in the same month last year, said Qi Gao, a currency strategist at Scotiabank in Singapore. That compares with a median forecast of 70.13 in a Bloomberg survey. Another rate cut by the Reserve Bank of India in its June policy, will also help boost local equities and bonds, said Gao.

The rupee rallied the most since December on Monday as stocks hit a record high after exit polls signaled Modi’s return to power for a second term. Actual results will be known on Thursday, when the votes are counted. The rupee was little changed Tuesday at 69.77 per dollar.