Rupee comes back stronger, becomes Asia’s top-performing currency in May

After months of fall, the rupee now has hit the market with a strong comeback to become Asia’s top-performing currency in May. Experts believe that this recovery in the rupee is purely a sign that the COVID-19 condition in India is improving.

As reported by Bloomberg, India’s currency has climbed 1.5 percent against the dollar in the month of May to beat all its regional peers as the daily coronavirus cases were witnessing a rapid decline after touching a record high. The report also added that with rupee regaining its value, it also has the benefit of offering Asia’s highest carry returns.

The revival of the rupee is a clear indication towards country’s efforts to tackle the pandemic. While rupee is coming on track, some fear that this might have an adverse impact on exports as the economy has lost its recovery momentum and is also emerging from a recession.

The rupee in April collapsed to its lowest in nine months because the rising number of COVID cases were impacting the currency as well. But with the decline in the daily count, the rupee started gaining value and has now become the best performing currency in Asia.

According to Barclays note, the rupee is likely to climb to 72.50 per dollar by the next quarter from around 73 now due to supportive flows and attractive valuations. It was also suggested that lack of intervention from the RBI could also play a role.

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