The Reserve Bank of India’s policy of keeping the rupee in a tight range thanks to interventions is shielding the country from global bouts of volatility. — Bloomberg
MUMBAI: Indian assets took the US election result in their stride, ring-fenced from the upheavals in other Asian markets as Donald Trump recaptures the White House.
India’s rupee slipped just 0.2%, a fraction of the drop registered by the yen or won.
The South Asian country’s benchmark 10-year yield was flat, compared with a three basis point increase for Indonesia’s and 18 basis points for their US counterpart.
The Reserve Bank of India’s (RBI) policy of keeping the rupee in a tight range thanks to interventions is shielding the country from global bouts of volatility, helping to make its bonds among the best performing within emerging markets this year.
The fixed income market has also benefited from a rush of funds after India was added to global indexes.
“We are not bystanders, we are there very much in the market,” RBI governor Shaktikanta Das said at an event here.
The financial sector and macroeconomy are resilient to spillovers from abroad, he also said.
Other emerging markets were hard hit by the so-called Trump trade as they stand to lose from the Republican’s policies, such as restrictions on imports and immigration. Mexico’s peso fell the most in three months, helping to send an emerging-market currency gauge toward its worst day since February 2023. Chinese equities sold off.
But India gained, boosted by software firms that do business with North America. — Bloomberg
