Rupee Volatility at 2-Month High as Debt Outflows Rise
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A gauge of expected swings in India’s rupee rose to the highest in more than two months as global funds stepped up sales of the nation’s debt amid uncertainties over a retrospective tax on capital gains.
Overseas investors were net sellers of $190 million of local-currency notes last week, according to the latest figures. They have withdrawn $192 million this month, after being net buyers in each month since April 2014. India has demanded that foreign portfolio investors pay a 20 percent levy on past capital gains. Outflows have continued even as the tax authority last week said investors can use treaties to reject such demands. Government bonds were little changed.