- Government last week announced $20-billion corporate tax cut
- The move spurred $374 million of inflows into Indian stocks in three days
- Fears of global recession have dented risk appetite for emerging markets
The carry trade for the Indian rupee is getting boosted after a shock $20 billion tax cut by the government.
The corporate tax reduction announced on Friday has spurred $374 million of inflows into Indian stocks in three days, and supported the rupee. That’s adding to the attractiveness of the currency for carry-trade strategies, according to UBS Group AG and Kotak Securities Ltd.
With the world’s pile of negative debt almost doubling to $15 trillion this year, investors are increasingly employing currency-related strategies that allow them to squeeze more yields. Going long on the rupee with borrowed dollars offered the best returns in the past month in Asia