Rupee could weaken past 75 if Modi fails to win second term: Expert

Economy & Policy:

Two of Asia’s biggest emerging economies will soon elect leaders, and wagers are already being placed on their currencies. The consensus: Indonesia’s rupiah will trump India’s rupee.
RupeeRupee It boils down to who retains power among the two pro-business incumbents. Opinion polls show Indonesian President Joko Widodo is set to win the April 17 vote, while Indian Prime Minister Narendra Modi’s position appears less secure following regional defeats for his party late last year.

“The rupiah offers a better risk-reward for investors than the rupee,” said Rainer Michael Preiss, an executive director at Taurus Wealth Advisors Pte. in Singapore. “With regard to Indonesia, our view is that consistency is good. If Modi doesn’t get re-elected, some people might think this is a negative and that could lead to more volatility in the rupee.”
The two nations are often compared as they offer high-yielding assets with large consumer bases. The duo is also vulnerable to changes in U.S. interest-rate policy.
Already a Winner

Judging by their performance this year, the rupiah is a defeats for his party late last year.
“The rupiah offers a better risk-reward for investors than the rupee,” said Rainer Michael Preiss, an executive director at Taurus Wealth Advisors Pte. in Singapore. “With regard to Indonesia, our view is that consistency is good. If Modi doesn’t get re-elected, some people might think this is a negative and that could lead to more volatility in the rupee.”


 Indonesia’s stocks and bonds have lured almost $3 billion from overseas funds since Jan. 1, while Indian assets have seen net outflows of about $100 million.