PIMCO bullish on the Indian Rupee
PIMCO, the 800-pound gorilla in the global bond markets, is bullish on the Indian rupee: Pimco buys derivatives to profit from Indian rates (via Mint)
The money manager has purchased non-deliverable rupee forwards tied to the future value of the rupee, Lian said in an interview in Singapore. The contracts are attractive because they reflect India’s rate advantage, he said. The nation’s bond yields are the third-highest in Asia.
The currency has appeal as a target for the carry trade, in which fund managers borrow in nations with low interest rates to invest in assets with higher returns.
There have been several bullish views on the rupee recently - whether that is a cause or an effect of the recent appreciation remains to be seen. And for those worried that the rupee is getting way over-valued, check out this recent ET column: Don’t worry, rupee isn’t really rising.
. . . the 36-currency REER did not appreciate. Indeed, it depreciated slightly in export-weighted terms in this five-year period (2001-02 to 2006-07), from 98.59 to 97.06. In relation to currencies most relevant for Indian trade, the rupee has not suffered from excessive strength in the last five years. If anything, it has been slightly weak.
Great! May we see the $:Rupee rate at 35, so we can go to the mall and buy even more imported stuff that we don’t need 
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