Latest news with #foreignbanks
Reuters
2 days ago
- Business
- Reuters
Rupee weakens slightly, broad dollar softness cushions pressure
MUMBAI, July 21(Reuters) - The Indian rupee logged a modest decline on Monday, pressured by dollar bids from foreign and local private banks, though broad-based weakness in the greenback helped the local currency limit further losses. The rupee closed at 86.2925 against the U.S. dollar, down about 0.2% on the day, after touching a near one-month low of 86.35 earlier in the session. Asian currencies were flat-to-slightly higher, while the dollar index declined by nearly 0.2% to 98.2. The Indian rupee and the Indonesian rupiah are among the few regional currencies nursing losses on the year so far, even as their peers, such as the Taiwan dollar and the Korean won, have climbed over 11% and 6%, respectively. Muted portfolio flows, India's external investment deficit and likely FX reserve accumulation by the Reserve Bank of India are among the reasons cited by analysts for rupee's lacklustre performance this year. On the day, price action appeared to indicate modest outflows but dollar-buying pressure eased in the latter half of the session, helping the rupee trim its losses, a trader at a private bank said. India's benchmark equity indexes, the BSE Sensex (.BSESN), opens new tab and Nifty 50 (.NSEI), opens new tab, closed higher by about 0.5% each on the day, while the benchmark 10-year bond yield was last quoted slightly lower at 6.2986%. In the near term, focus will be on developments on two fronts: how U.S. economic data impact expectations of rate cuts and news surrounding U.S.-India trade negotiations ahead of the August 1 deadline for higher U.S. tariffs to take effect. "We maintain our view that slower growth, profit margin compression and export price reduction will contain the impact of tariffs, and that a slower economy will justify the Fed resuming rate cuts in September," ANZ said in a Monday note.
Finextra
15-07-2025
- Business
- Finextra
Unlocking the Future of Global Payments: A Deep Dive into China's CIPS: By Galong Yao
As the world's financial landscape evolves, the need for efficient, secure, and globally connected payment systems has never been more pressing. China's Cross-border Interbank Payment System (CIPS) is rapidly emerging as a central artery in the internationalization of the Renminbi (RMB), offering a robust infrastructure for cross-border settlements and reshaping how global institutions engage with China's markets. What Is CIPS and Why Does It Matter? CIPS, established under the approval of the People's Bank of China, is a wholesale payment system dedicated to cross-border RMB transactions. Unlike traditional mechanisms, CIPS provides both real-time gross settlement (RTGS) and deferred net settlement (DNS) modes, enabling financial institutions worldwide to clear and settle RMB transactions across time zones. This infrastructure is not just technical—it is strategic, positioning China as a pivotal player in global finance. Participation and Account Structure CIPS distinguishes between direct and indirect participants. Notably, foreign banks can become direct participants, opening dedicated accounts and obtaining unique CIPS codes. However, these institutions must partner with domestic custodian banks to maintain settlement accounts, ensuring regulatory oversight and liquidity management. As of August 2024, there are 170 direct participants and 10 custodian banks, reflecting the system's expanding international reach. How Does CIPS Operate? The system operates on a '5×24 hours + 4 hours' schedule, ensuring near-continuous availability for global transactions. Participants manage their liquidity through funding, pre-funding, and real-time adjustments, while CIPS employs mechanisms such as margin requirements and queue management to control risk. At the end of each cycle, accounts are reconciled and cleared, ensuring transparency and operational integrity. Modernizing Cross-Border Settlement Before CIPS, RMB cross-border payments relied on clearing banks, correspondent banking, and Non-Resident Account (NRA) models—often resulting in delays and inefficiencies. CIPS streamlines this process by allowing direct participants to settle transactions within the system, while indirect participants access the network through their direct partners. Importantly, legacy models remain compatible, offering flexibility as the ecosystem transitions. Technology and Interoperability CIPS adopts the ISO20022 standard and provides a standard message interface, supporting both API and GUI operations. This ensures seamless integration with global financial systems and enhances the speed and reliability of cross-border payments. Regulatory Evolution Reflecting its dynamic growth, the People's Bank of China recently released a draft revision of the CIPS business rules, inviting public feedback and signaling ongoing commitment to innovation and openness. Looking Ahead CIPS is more than a payment system—it is a strategic lever for RMB internationalization and a blueprint for the future of cross-border finance. As global institutions seek new pathways for efficiency and risk management, understanding CIPS will be essential for anyone engaged in international trade and finance. What are your thoughts on the future of cross-border payments? How do you see systems like CIPS influencing global finance? Let's connect and discuss.
Reuters
14-07-2025
- Business
- Reuters
Rupee pinned near key support on corporate dollar demand, cloudy tariff outlook
MUMBAI, July 14(Reuters) - Dollar demand from foreign banks and a large local corporation, alongside tepid risk appetite amid lingering uncertainty on U.S. trade policies, drove the rupee lower to a closely watched support level on Monday. The South Asian currency fleetingly weakened past the 86 level in early trading and before paring losses to last quote at 85.97 as of 10:45 a.m., down 0.2% on the day. Asian currencies were mostly weaker, while the dollar index was hovering just shy of the 98 mark. President Donald Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the European Union starting on August 1, adding them to a list of countries that have received letters from the U.S. declaring country-specific levies. India and Taiwan are among the large U.S. trading partners that have not yet received letters declaring the tariff rate. A constant barrage of tariff-related headlines, along with the expectations that these are merely negotiating tactics, has dampened market reactions, such as the euro, which slipped just 0.1% on Monday. "The game between Trump and the market is subject to multiple equilibria," BofA Global Research said in a note. The note added that it would be key to watch how much renewed tension risky assets can withstand before correcting lower, and how much pain Trump would tolerate before de-escalation occurs. Asian equities were mostly in the green on Monday, while futures for the euro-area and U.S. stock gauge were in the red. India's benchmark equity indexes, the BSE Sensex (.BSESN), opens new tab and Nifty 50 (.NSEI), opens new tab, each was down about 0.3% on the day. Dollar bids from foreign banks, likely on behalf of custodial clients, also exerted pressure on the rupee, a trader at a private bank said. India's consumer inflation data for June is due after FX market hours on Monday.
Reuters
01-07-2025
- Business
- Reuters
Rupee poised to rise after dollar slumps; importer flows remain in focus
MUMBAI, July 1 (Reuters) - The Indian rupee is likely to inch up at open on Tuesday, helped by the dollar falling to a fresh multi-year low on worries over U.S. fiscal and trade policy. However, traders said the upside for the local unit may be limited, citing recent price action that points to persistent dollar buying by importers. The 1-month non-deliverable forward indicated an open in the 85.64 to 85.68 range, versus 85.7550 in the previous session. On Monday, the Indian currency rallied to 85.30, before dollar buying by state-run and foreign banks triggered a reversal. The reversal from 85.30 shows how challenging it is for the rupee to hold on at levels above 85.50, a currency trader at a private bank said. Importer demand is "always lurking and yesterday, I reckon there were outflows via foreign banks." The rupee's performance on the final day of June was reflective of its struggle through the month, during which it consistently lagged behind its Asian peers. While most regional currencies rallied between 4% and 12% in June, the Indian unit declined slightly, underscoring its relative underperformance. The dollar index slumped to a more than three-year low on Monday and held those losses during Asia hours, weighed down by concerns over the U.S. fiscal deficit and uncertainty around key trade agreements. Investors are staying away from the dollar amid U.S. Senate's efforts to pass President Donald Trump's tax and spending bill, which faces internal Republican resistance due to its projected $3.3 trillion impact on the national debt. On trade, the July 9 deadline for Trump's tariffs is fast approaching. Investors are keeping an eye on trade deals between the U.S. and its partners. In good news for the rupee, the White House said that the U.S. and India are very near to finalising a trade deal. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.76; onshore one-month forward premium at 11 paise ** Dollar index at 96.77 ** Brent crude futures down 0.5% at $66.4 per barrel ** Ten-year U.S. note yield at 4.22% ** As per NSDL data, foreign investors bought a net $663.3 million worth of Indian shares on June 27 ** NSDL data shows foreign investors sold a net $25.2 million worth of Indian bonds on June 27
Bloomberg
30-06-2025
- Business
- Bloomberg
Swiss Sight Deposits Soar After SNB Introduced Zero Rate Regime
Sight deposits at the Swiss National Bank rose sharply after its reduction of borrowing costs to zero, as foreign banks moved cash to the institution to escape negative interest paid in the money market. Last week, total sight deposits increased by some 18 billion francs ($23 billion) compared to the previous period, according to data published on Monday. This was due to holdings from foreign banks rising by 22 billion francs, while those of domestic lenders dropped by 4 billion francs.
