Latest news with #DharamrajDhutia
Yahoo
a day ago
- Business
- Yahoo
Rupee logs worst losing streak in 6 months on US tariff woes; RBI caps damage
By Dharamraj Dhutia MUMBAI (Reuters) - The Indian rupee ended lower for a fifth straight week, its biggest consecutive weekly drop in six months, as trade tensions between India and the United States escalated following President Donald Trump's call for new tariffs on Indian goods. The rupee closed marginally higher at 87.6550 against the U.S. dollar, from 87.7025 on Thursday. The currency opened at 87.5600 and reached an intraday high of 87.5350, supported by unwinding of long dollar positions in the NDF market. Dollar bids, primarily from oil importers, pushed the USD/INR higher after initial lows, traders said. For the week, the rupee eased 0.1%, following a 1.2% drop last week, and has depreciated nearly 3% over the past five weeks. Rising pressure on the rupee was driven by India's position among the hardest-hit countries in Trump's trade offensive, including a new 25% tariff on Indian goods. The move places India alongside Brazil, facing the steepest import duties, unsettling markets concerned about the impact on capital flows and investor sentiment towards Indian assets. Fears of a record low in the currency prompted the Reserve Bank of India to intervene almost daily, preventing a deeper slide, traders said. The RBI resumed intervention in the NDF market to manage rupee volatility, four bankers told Reuters. Market participants expect another drop in foreign exchange reserves that saw a decline of more than $9 billion in week ended August 1, indicating intervention in the spot market. Meanwhile, some remain hopeful that a resolution would be achieved in coming period. Looking at the recent history, there is a high probability that the U.S. lowers tariffs in coming weeks or months and this could lead to a relief rally in Indian markets, as and when it happens, said Nishit Master, portfolio manager at Axis Securities PMS. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
2 days ago
- Business
- Mint
India bond yields a tad up this week amid RBI-led selloff
MUMBAI, Aug 8 (Reuters) - Indian government bond yields ended higher on Friday and for the week after the central bank maintained interest rates and signalled a hawkish inflation outlook for next year. The yield on the benchmark 10-year bond ended at 6.4121%, after closing at 6.3861% on Thursday. The yield rose 4 basis points for the week. The Reserve Bank of Indian held rates steady on Wednesday, kept the growth forecast unchanged, and said it expects inflation to rise above 4% from January. This, along with the lack of any dovish cues, triggered a large selloff after the decision, dampening rate cut expectations. New Delhi sold bonds earlier on Friday, with the auction seeing strong demand. This was despite fears of weak interest after the RBI decision. "The demand assured the market, which pushed the benchmark bond yield below the key support level of 6.38%," a trader at a private bank said. Meanwhile, July retail inflation is set to ease to an eight-year low of 1.76% versus 2.10% in June, per a Reuters poll. The market is now divided, with several analysts saying the economic outlook suggests no further rate cuts, although others expect growth and inflation to undershoot forecasts, which may open the door to at least one more reduction. UBS Securities expects inflation to average at 3% this year, and expects the terminal repo rate to fall to the 5.0%-5.25% range. "For now, we add one 25 bps rate cut in October meeting to our baseline, with risk of another if growth surprises lower driven by US trade tariffs," said Tanvee Gupta Jain, chief India economist at UBS Securities. RATES India's overnight index swap rates were little changed, while the longer duration swap moved lower. The one-year OIS rate ended at 5.50% and the two-year OIS rate ended at 5.4550%. The liquid five-year OIS rate finished at 5.67%. (Reporting by Dharamraj Dhutia; Editing by Sonia Cheema)
Mint
4 days ago
- Business
- Mint
India bond yields to extend rise on central bank policy woes
MUMBAI, Aug 7 (Reuters) - Indian government bond yields are likely to extend their rise on Thursday, following the previous session's sharp selloff, which was triggered by disappointment over the central bank's monetary policy decision and commentary. The yield on the benchmark 10-year bond is likely to move between 6.40% and 6.45%, a trader at a private bank said, after closing at 6.4162% on Wednesday, the highest closing since April 15. The Reserve Bank of India held its key policy rate steady on Wednesday, as the policymakers opted for a wait-and-watch approach to see the impact of the previous rate cuts on the economy. The RBI also kept its growth forecasts unchanged, while reducing the inflation forecast. RBI Governor Sanjay Malhotra said that while inflation is much lower than expected, it is largely due to volatile food prices and is set to rise by end of the year. The decision came even as a rising number of market participants had hoped for a rate cut. The market is now divided with several analysts saying the economic outlook suggests that there may be no more rate cuts. "The policy will decide on which side of the par level of 6.33% the benchmark bond yield moves," the trader said. State Bank of India said the repo rate of 5.50% seems to be "a long haul" for now and the bar for a further rate cut in 2025 is now even higher. India's overnight index swap rates may continue to see paying as the interest rate outlook is uncertain. The one-year OIS rate ended nearly 7 basis points higher at 5.51%, and the two-year OIS rate rose 8 bps to 5.47%. The liquid five-year OIS rate rose by 6 basis points to 5.70%. KEY INDICATORS: ** Benchmark Brent crude futures up 0.9% to $67.50 per barrel after easing 1.1% in previous session ** Ten-year U.S. Treasury yield at 4.2442%; two-year yield at 3.7157% (Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)
Mint
5 days ago
- Business
- Mint
India bond yields flat, traders await central bank guidance for directional triggers
MUMBAI, Aug 6 (Reuters) - Indian government bond yields were unmoved in early deals on Wednesday ahead of the Reserve Bank of India's monetary policy decision, with market participants betting on a dovish tilt. The yield on the benchmark 10-year bond was at 6.3311% as of 9:40 a.m. IST, after closing at 6.3321% on Tuesday. The central bank will announce its decision on 10:00 a.m. IST. A majority of economists expect the authority to keep rates unchanged, according to a Reuters poll. However, a growing number of market participants have been laying bets on a rate cut, as June retail inflation dropped to a more than six-year low and July inflation is expected to hit a record low. "We could see a move of around 5 basis points on the benchmark yield on either side as a hawkish policy will see 6.38%, while a dovish tone could lead to test of 6.28% levels," a trader with a state-run bank said. A dovish commentary and downward revision to economic forecasts by the central bank could drive a fall in government bond yields and overnight index swap rates, even without an actual rate cut, market participants said. RBI's commentary on liquidity management will be closely watched. Traders expect the RBI to release its new liquidity management framework this week. In June, the central bank changed its stance to "neutral" while cutting the benchmark rate by 50 basis points. Nuvama expects the rate-setting committee to keep policy rates unchanged, while retaining the "neutral" stance given the evolving global and domestic macroeconomic backdrop. India's overnight index swap rates were little changed as traders waited for policy decision and commentary from RBI officials. The one-year OIS rate was at 5.44%, and the two-year OIS rate was at 5.40%. The liquid five-year OIS rate was at 5.64%. (Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)
Mint
7 days ago
- Business
- Mint
India bond yields seen starting RBI policy week with a decline
MUMBAI, Aug 4 (Reuters) - Indian government bond yields are expected to start the week when the central bank will announce its rate decision with a declining trend, tracking a drop in U.S. Treasury yields after weaker economic data fuelled bets of a September U.S. rate cut. The yield on the benchmark 10-year bond is likely to move between 6.33% and 6.36%, a trader at a private bank said, after closing at 6.3680% on Friday. "Weaker U.S. data may not act as a large game changer, but will definitely give confidence to bulls who could further build positions to play out a rate cut this week," the trader said. Treasury yields plunged, led by the shorter-end notes, which are more reactive to change in interest rates, after data showed U.S. job growth slowed more than expected last month, while June's data was revised sharply lower. Nonfarm payrolls increased by 73,000 jobs in July, after rising by a downwardly revised 14,000 in June, while economists polled by Reuters had forecast payrolls increasing by 110,000. The unemployment rate rose to 4.2% from 4.1% in June. The odds of a rate cut by the Federal Reserve in September have risen above 80% after the data, against around 60% last week, according to CME FedWatch Tool. Meanwhile, the Reserve Bank of India's monetary policy decision is due on Wednesday, in which the authority is expected to keep rates unchanged, according to a majority of the economists polled by Reuters. Some market participants have still been laying bets on a rate cut this week, as June retail inflation dropped to a more than six-year. The central bank changed its stance to "neutral" while cutting the benchmark rate by 50 basis points at its last meeting in June. RATES India's overnight index swap rates are expected to witness receiving interest with local bond yields declining, and as U.S. yields dropped. The one-year OIS rate ended at 5.51%, and the two-year OIS rate finished at 5.47%. The liquid five-year OIS rate settled at 5.7150%. KEY INDICATORS: ** Benchmark Brent crude futures down 0.3% to $69.40 per barrel after easing 4% in the previous session ** Ten-year U.S. Treasury yield at 4.2513%; two-year yield at 3.7206% (Reporting by Dharamraj Dhutia)
