Sliding rupee pushes up State Bank of India's CDS

08/19/2013 | Reuters

Five-year credit default swaps for State Bank of India have jumped 45 basis points from their close Friday, to 351 basis points, the highest level in 14 months, according to Markit Group. The increase comes as India's rupee hits a record low against the U.S. dollar. "The CDS move is understandable," Societe Generale analyst Guillaume Salomon said. "When the currency is under pressure, it raises the question of how they will finance the deficit, hence the reason CDS is widening."

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