MUMBAI: India's rupee strengthened for a second day before lawmakers vote on a plan to allow overseas companies to open retail stores in the country.
The rupee advanced 0.2 per cent to 54.5575 per dollar in Mumbai. One-month implied volatility, a measure of expected moves in exchange rates used to price options, was unchanged at 10 per cent. The currency's gains will be limited by concerns about deadlocked budget talks in the US, said Pramit Brahmbhatt, Mumbai-based chief executive at Alpari Financial Services India.
Parliament's backing will help Prime Minister Manmohan Singh silence criticism of his government's biggest policy push in a decade to boost foreign investment and spur growth before a general election in less than two years. Goldman Sachs predicted the currency will gain in the 'medium term'.
Three-month onshore rupee forwards traded at 55.49 per dollar. - Bloomberg News
, compared to 55.51 yesterday, according