Bloomberg News

Importers Should Wait to Hedge Rupee, QuantArt’s Lodha Says

February 13, 2012

Feb. 13 (Bloomberg) -- Samir Lodha, managing director at QuantArt Market Solutions Ltd. in Mumbai, says importers should delay or reduce hedging against the dollar at current levels as the rupee will probably continue to strengthen. He commented in an e-mail today.

The rupee advanced 0.2 percent to 49.3063 per dollar as of 12:41 p.m. in Mumbai, taking this year’s gain to 7.6 percent.

“The Reserve Bank of India apparently intervened on Feb. 10 and sold dollars at around the 49.75 level. It seems the RBI is determined to not allow the rupee to weaken much since a depreciated rupee adversely affects critical non-food inflation.

“Importers and foreign investors in India can decrease the amount of currency they have hedged and wait for around 48.50 or 48 per dollar to hedge import payments. At the same time they should monitor the RBI’s actions. If the RBI does not protect 50 then importers should hedge.”

--Editor: Andrew Janes

To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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