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The Indian rupee’s recent gains could be short-lived as pressure grows on Prime Minister Narendra Modi’s administration to announce a nationwide lockdown to curb a deadly wave of coronavirus infections. The prospect of stricter curbs is reviving memories of last year when similar measures dragged India’s economy into its worst contraction in four decades. It’s also threatening to weaken the rupee, which is among Asia’s top three performers this month, thanks to heavy foreign inflows for initial public offerings, a dovish Federal Reserve and a glut of dollars at state-run banks. “The recovery in the rupee in recent weeks reflects the softer dollar and weaker import demand as restrictions were imposed,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. “If a nationwide lockdown were to be implemented, we could see some near-term weakness in the rupee.”
Rupee gains under siege as health crisis fuels lockdown fears
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Last Updated: May 10, 2021, 07:21 AM IST
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The dollar-rupee’s slow stochastics, a momentum indicator, shows that the currency pair is in oversold territory. The rupee rose 0.8% last week to 73.51 per dollar.
Bloomberg
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By David Finnerty
The Indian rupee’s recent gains could be short-lived as pressure grows on Prime Minister Narendra Modi’s administration to announce a nationwide lockdown to curb a deadly wave of coronavirus infections.
The prospect of stricter curbs is reviving memories of last year when similar measures dragged India’s economy into its worst contraction in four decades. It’s also threatening to weaken the rupee, which is among Asia’s top three performers this month, thanks to heavy foreign inflows for initial public offerings, a dovish Federal Reserve and a glut of dollars at state-run banks.
RBI faces key auction as traders balk at yields
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Last Updated: Apr 22, 2021, 07:13 AM IST
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Synopsis
Underwriters were forced to rescue a five-year bond sale on April 9 and the RBI canceled an offering altogether on April 16.
The Reserve Bank of India’s explicit assurance to buy 1 trillion rupees ($13 billion) of bonds this quarter has failed to encourage more purchases by traders.
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By Subhadip Sircar
Barely weeks into India’s new borrowing program, the nation’s sovereign bond traders and the central bank are shaping up for a third bruising battle.
The Reserve Bank of India’s explicit assurance to buy 1 trillion rupees ($13 billion) of bonds this quarter has failed to encourage more purchases by traders. Underwriters were forced to rescue a five-year bond sale on April 9 and the RBI canceled an offering altogether on April 16 when traders demanded higher yields for benchmark 10-year debt.