The Indian rupee is gaining strength as a prominent contender among emerging market currencies due to the uncertainty surrounding the upcoming US presidential election.
Traders are seeking safe havens, leading to increased volatility in currency markets. The Reserve Bank of India is ready to support the rupee, backed by the world's fourth-largest foreign exchange reserves, which instills confidence in the currency's stability.
The cost of hedging against dollar fluctuations has risen to its highest levels since early 2020, reflecting the market's concern over potential outcomes. Market participants are closely monitoring developments as the lack of a clear frontrunner in the election intensifies the search for protective measures against currency risk.