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Reuters
21-05-2025
- Business
- Reuters
India cenbank to slow cash boost after $100 billion injection; surplus transfer eyed, say economists
MUMBAI, May 21 (Reuters) - The Reserve Bank of India is expected to slow its liquidity infusion after pumping 8.57 trillion rupees ($100.06 billion) into the banking system since December, with a large surplus transfer to the government expected soon, several economists said. The central bank concluded its final scheduled open market bond purchase on Monday, and has not yet announced any more purchases. The RBI has been infusing liquidity since the last six months. "Dividend payment to the government and subsequent government expenditure will release adequate funds into the system and there should be no need to infuse liquidity through OMOs (open market operations)," said Sandeep Bagla, CEO at Trust Mutual Fund. Estimates for the upcoming surplus transfer range from 2.5 trillion to 3 trillion rupees as per seven economists, though those at Citi expect a larger payout of between 3.5 trillion rupees and 4 trillion rupees. The RBI has of late slashed its cash reserve ratio, followed by secondary market debt purchases, foreign exchange swaps and aggressive open market operations. It is expected to announce its surplus transfer to the government before the end of this month. "With the dividend payment, the core liquidity may cross 5 trillion rupees, which is a very high number. For the next three months RBI need not inject durable liquidity, they can look at OMOs may be from September onwards," said A Prasanna, head of research at ICICI Securities Primary Dealership. Bond market participants expect a pause in the recent price rally, with yields likely to consolidate after a sharp move. The 10-year benchmark yield has dropped 38 basis points since the start of the financial year, following a 17 bps decline in the prior four months. Shorter duration bond yields have seen a more significant drop, with the five-year yield down 57 bps since April 1 after easing by 26 bps in previous four months. "We do not expect any more announcement for open market purchases in this month, and with expectation of terminal repo rate of 5.50%, the decline in the 10-year benchmark bond yield could bottom out around 6.15%-6.20% levels for now," said VRC Reddy, treasury head at Karur Vysya Bank. ($1 = 85.6460 Indian rupees)
Zawya
08-05-2025
- Business
- Zawya
Indian rupee, shares, bonds drop on signs of escalation in India-Pakistan conflict
The Indian rupee, equities and bonds dropped on Thursday, pressured by risk aversion after India said it pushed back Pakistani retaliation overnight. The rupee dropped 1% to 85.71, the Nifty 50 benchmark share index declined 0.6%, while the yield on India's benchmark 10-year bond rose 6 basis points. The markets came under pressure in late afternoon trading after the Indian government said it had "neutralised" attempts by Pakistan to "engage" several military targets. Pakistan, meanwhile, said it had shot down 25 drones from India in its airspace. "This is a knee-jerk reaction from the markets just as we had expected due to the escalation of border tensions," said Sandeep Bagla, CEO of Trust Mutual Fund. On Wednesday, India said it hit "terrorist infrastructure" in Pakistan two weeks after it accused the Islamic nation of involvement in an attack in Indian Kashmir in which 26 people, mostly Hindu tourists, were killed. The United States, Russia and China have urged the South Asian countries to exercise restraint. Volatility gauges for the rupee and Indian equities have spiked, reflecting the nervousness among market participants. The Nifty volatility index rose to a peak of 21.9 in intra-day trade, the highest since April 9, while the rupee's volatility has also spiked to an over two-year high. India's overnight index swap (OIS) rates also jumped, with the most-liquid five-year rate rising 12 basis points to 5.68% on the likely unwinding of speculative positions In Pakistan, trading in the benchmark share index was halted after the index slumped 6.3% on news of the drone attacks. The country's international bonds also extended recent losses. Cross-border developments are expected to stay in focus going forward, with market participants likely to remain risk-averse in the near term, traders said. "If the conflict were to escalate, worries might rise regarding important industrial / infra facilities located close to the India-Pakistan border," Jefferies said in a report dated May 7. "Based on precedents, we believe that any potential market correction on the back of escalation would be short-lived." In the medium term, traders expect the focus to return to fundamentals and the U.S.-India talks on a trade deal, following the UK-India trade deal. (Reporting by Jaspreet Kalra, Khushi Malhotra and Bharath Rajeswaran; Editing by Mrigank Dhaniwala)
Business Recorder
08-05-2025
- Business
- Business Recorder
Indian rupee, shares, bonds drop on signs of escalation in India-Pakistan conflict
MUMBAI: The Indian rupee, equities and bonds dropped on Thursday, pressured by risk aversion after India said it pushed back Pakistani retaliation overnight. The rupee dropped 1% to 85.71, the Nifty 50 benchmark share index declined 0.6%, while the yield on India's benchmark 10-year bond rose 6 basis points. The markets came under pressure in late afternoon trading after the Indian government said it had 'neutralised' attempts by Pakistan to 'engage' several military targets. Pakistan, meanwhile, said it had shot down 25 drones from India in its airspace. 'This is a knee-jerk reaction from the markets just as we had expected due to the escalation of border tensions,' said Sandeep Bagla, CEO of Trust Mutual Fund. On Wednesday, India said it hit 'terrorist infrastructure' in Pakistan two weeks after it accused the Islamic nation of involvement in an attack in Indian Kashmir in which 26 people, mostly Hindu tourists, were killed. Indian rupee falls most in a month after Indian strikes in Pakistan raise tensions The United States, Russia and China have urged the South Asian countries to exercise restraint. Volatility gauges for the rupee and Indian equities have spiked, reflecting the nervousness among market participants. The Nifty volatility index rose to a peak of 21.9 in intra-day trade, the highest since April 9, while the rupee's volatility has also spiked to an over two-year high. India's overnight index swap (OIS) rates also jumped, with the most-liquid five-year rate rising 12 basis points to 5.68% on the likely unwinding of speculative positions In Pakistan, trading in the benchmark share index was halted after the index slumped 6.3% on news of the drone attacks. The country's international bonds also extended recent losses. Cross-border developments are expected to stay in focus going forward, with market participants likely to remain risk-averse in the near term, traders said. 'If the conflict were to escalate, worries might rise regarding important industrial / infra facilities located close to the India-Pakistan border,' Jefferies said in a report dated May 7. 'Based on precedents, we believe that any potential market correction on the back of escalation would be short-lived.' In the medium term, traders expect the focus to return to fundamentals and the U.S.-India talks on a trade deal, following the UK-India trade deal.
Yahoo
08-05-2025
- Business
- Yahoo
India rupee, shares, bonds weaken after India says it 'neutralised' attempts to engage military targets
MUMBAI (Reuters) -The Indian rupee, equities and bonds dropped in late afternoon trading on Thursday after India said it "neutralised" attempts by Pakistan to "engage" several military targets in its northern and western regions on Wednesday night and early Thursday. Indian armed forces targeted air defence radars and systems at a number of locations in Pakistan on Thursday, the government said in a statement. Pakistan's military said that it had shot down 25 Indian drones. The rupee declined to a low of 85.59 per dollar, down 0.8% on the day while the benchmark 10-year bond yield rose over 7 basis points from its day's low to 6.3807%. India's benchmarks NSE Nifty 50 and BSE Sensex extended losses to slip 0.5% and 0.4%, respectively, hovering near their session lows. "This is a knee-jerk reaction from the markets just as we had expected due to escalation of border tensions," said Sandeep Bagla, chief executive officer at Trust Mutual Fund. The Nifty volatility index has risen in 10 of the 11 sessions since the Islamist militant attacks on Hindu tourists in Kashmir last month. The fear gauge rose to 21.48 in intraday trade, the highest since April 9. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Al Arabiya
08-05-2025
- Business
- Al Arabiya
Rupee, markets fall after India says it ‘neutralised' attempts to engage military targets
The Indian rupee, equities and bonds dropped in late afternoon trading on Thursday after India said it 'neutralized' attempts by Pakistan to 'engage' several military targets in its northern and western regions on Wednesday night and early Thursday. Indian armed forces targeted air defense radars and systems at a number of locations in Pakistan on Thursday, the government said in a statement. Pakistan's military said that it had shot down 25 Indian drones. The rupee declined to a low of 85.59 per dollar, down 0.8 percent on the day while the benchmark 10-year bond yield rose over 7 basis points from its day's low to 6.3807 percent. India's benchmarks NSE Nifty 50 and BSE Sensex extended losses to slip 0.5 percent and 0.4 percent, respectively, hovering near their session lows. 'This is a knee-jerk reaction from the markets just as we had expected due to escalation of border tensions,' said Sandeep Bagla, chief executive officer at Trust Mutual Fund. The Nifty volatility index has risen in 10 of the 11 sessions since the Islamist militant attacks on Hindu tourists in Kashmir last month. The fear gauge rose to 21.48 in intraday trade, the highest since April 9.
