Indian Rupee Posts Huge Daily Gain After Retreating From Record Low
The Indian rupee has seen a major upside rally today, and in turn experienced the largest single day gain within the last three years, after the Indian government advised it is not going to look for any foreign investors retroactive taxes. Combine this with the fact that Euro-zone policy makers today agreed on a plan to bring down Spain and Italy’s high borrowing costs and subsequently create a supervisory body for the euro-zone area banking sector by the end of 2012.
Foreign portfolio investors has been concerned that the Indian government would apply retroactive anti avoidance rules, and the confirmation that this is not going to be the case has seen an increase in appetite for the Indian Rupee. The rupee was trading at the 55.6050/6150 rate according to data from the State Bank of India which was a 3.1% gain over the prior close. The rupee had dropped to a record low around 57.32 versus the US dollar only one week ago.