Encouraged by the strong foreign influx into the equities market on the expectation of PM Narendra Modi’s re-election in May, Indian currency Rupee rose to its highest yesterday in several weeks, reports Reuters.
Notably, the appreciation in the value of rupee in the forex market was also aided by the absence of Reserve Bank of India’s (RBI) intervention.
In its most robust performance since 2nd January 2019, the rupee rose to its highest level of 69.56 per US dollar. India’s national currency was also more stable by 0.47 per cent than the previous day closing price of 69.89.
According to reports, it’s the Modi appeal and the prospect of him coming back to power for a second term in the coming general elections which has resulted in an upward trend in the foreign inflows into Indian stock markets.
Though typically, most exporters bring back their dollars to India towards the end of the fiscal year to settle their annual accounts and repayment of debts which increases inflows, this time the increased popularity of the PM following India’s military strike on Pakistan in retaliation for the Pulwama attack has also acted as a catalyst.
“Typically, the rupee rises in March due to seasonal factors. But this time the Modi factor is also getting quite a bit of inflow,” said a forex dealer at a state-run bank.
It was earlier reported that as per the latest tracker 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.
Meanwhile, the surging popularity of Modi led NDA government could also be seen as three opinion polls, published on March 11th, rejecting all previous predictions of a hung parliament, envisioned a clear majority of the NDA in the upcoming general elections.
Two other opinion polls, ABP News- C Voter and Zee 24 Taas predicts 264 seats for NDA, while is falls marginally short of the majority mark 273. UPA and others are predicted to win 141 and 138 in the ABP News survey, and 165 and 114 seats in the Zee 24 survey. The C Voter survey also predicts that if there are no mahagathbandhan of opposition parties in Uttar Pradesh, the NDA tally will go up to 307.
Moreover, because the election results have a direct impact on share market performances in India, since the opinion polls have shown increased prospect of NDA coming back to power, the Stock market has also been seeing a continuous upsurge.