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Rupee carry trade

DNA reports on the possibility of a rupee carry trade - Boom seen luring more carry trades :

Carry trade involves borrowing in low-yielding currencies like the Japanese yen and investing in higher-yielding ones like the rupee.

Borrowings in yen would save a company about 7-8% in interest cost.

Out of the incremental money coming into India, 40% were through hedge funds through participatory notes.

More good news for rupee bulls! Note the disconnect between the supposed over-valuation of the rupee (by 10%) and the bullish fundamentals in favor of the currency.

This entry was posted on Wednesday, April 11th, 2007 at 10:10 am and is filed under exchange-rates. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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    One Response to “Rupee carry trade”

    1. Nikhil Says:
      April 11th, 2007 at 5:02 pm

      Please see the link of ICICI Bank which is offering about 8% return on carry trade.

      http://www.icicinri.net/rupeeplan/index.asp?rfr=expindia_invest_textlink