Long positions on India's rupee were sharply raised to a three-year high, a Reuters poll found, as the central bank cut back on dollar-buying, while a weaker greenback and encouraging economic recovery signs propped up bullish bets on other Asian currencies. India's economy shrank 23.9% in the three months to June, much more than forecast, pointing to a longer than previously expected recovery, with analysts calling for further stimulus. Long bets on the Chinese yuan, South Korea's won, Singapore's dollar and the Malaysian ringgit were all raised to their highest since early 2018.
The Indian rupee rose to its highest level in nearly six months on Friday, gaining for a third straight session, with traders saying the central bank refrained from currency intervention as foreign investors piled into equity markets. The currency had been trading in a tight range until this week, as the Reserve Bank of India was seen regularly buying dollars via state-run banks to prevent a sharp appreciation in the rupee. The partially convertible rupee ended Friday at 73.3850 per dollar, up 0.6% on day.
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA * Indonesian rupiah slips to lowest since May 29 * India's rupee hits 3-month peak at 74.60 per dollar * Asian stocks, ex-Japan, set for weekly gains By Rashmi Ashok July 3 (Reuters) - The Indonesian rupiah slipped nearly 2% on Friday on worries about inflationary risks from its central bank buying low-yielding bonds, while the Indian rupee hit a three-month high on expected inflows and non-intervention by the central bank. The rupiah headed for a loss of more than 2.6% against the dollar this week, its biggest weekly fall since the near 8% plunge it recorded in mid-March during a severe dollar funding shortage in Asian markets. Investors turned cautious after Bank Indonesia (BI)on Monday agreed to 'share the burden' with the government and buy bonds with even zero yields to help finance a fiscal deficit bloated by spending to tackle the coronavirus outbreak.