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Indian bonds extended their declines after the mention of debt sale as an option to remove rupee liquidity. | Photo Credit: KUNAL PATIL The Reserve Bank of India would not rule out any instruments to manage liquidity and keep the overnight rate aligned with the repo rate, Governor Sanjay Malhotra told CNBC-TV18 on Friday.Some of the surplus liquidity in the banking system would be withdrawn over time through foreign exchange interventions and banks’ reserve requirements, Malhotra said, adding that the central bank’s objective was to maintain appropriate liquidity conditions.”We have enough tools to manage liquidity, other than VRRR, such as…
The RBI is “not taking any tools off the table” to manage liquidity and keep the overnight rate aligned with the key repo rate, Malhotra said, pointing to open market bond sales and FX swaps among the options. | Photo Credit: istock.com The rupee slipped on Friday and fell over 1% week-on-week as a sharp rise in oil prices pressured Indian markets, though the central bank’s intervention helped limit the currency’s decline.The rupee declined 0.1% to end at 95.55, weakening for the fourth straight day. On the week, it declined 1.1%, the sharpest fall since mid-May when surging oil prices…
BRICS countries can strengthen trade in local currencies and facilitate cross-border investments by deepening financial markets, strengthening banking linkages and putting in place robust risk-management mechanisms, experts said on Friday.They also said that linking fast-payment platforms and exploring interoperability among Central Bank Digital Currencies could make cross-border transactions faster, cheaper and more secure.”One of the ways to establish this (strengthen trade in local currencies and facilitate cross-border investments) objective is to build on commitments to expand the use of local currencies in trade and investment, greater use of national currencies can support this objective, provided it is accompanied by deeper…
The US Bureau of Labor Statistics (BLS) will publish the August Consumer Price Index (CPI) data on Friday. The report is expected to show a small decline in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s (Fed) policy outlook and impact the US Dollar’s valuation.The monthly CPI is forecast to rise by 0.4%, following the 0.1% increase recorded in July, while the annual reading is seen holding steady at 3.4%. Core CPI figures, which exclude volatile food and energy prices, are expected to post an increase of 0.2% and 2.4%, on a monthly and yearly…
The rupee depreciated 27 paise to 95.79 against the US dollar in early trade on Friday driven by elevated crude oil prices and foreign portfolio outflows.Forex traders said while record foreign exchange reserves, active Reserve Bank intervention, and robust domestic growth provide crucial support, rising global yields and crude trading above $108 continue to weigh heavily on the country’s import bill.At the interbank foreign exchange market, the rupee opened at 95.70 against the US dollar, then lost ground to touch 95.79, registering a loss of 27 paise from its previous close.On Thursday, the rupee depreciated 44 paise to close at…
Asian stocks declined sharply on Friday, tracking the overnight fall on Wall Street, as a surge in energy prices and a global bond selloff trigger the broader risk-off move.Crude oil prices shot to the highest level on May 21 as increasing attacks along key shipping routes in the Middle East fuel fears of a prolonged disruption to supplies. In fact, Iran-backed Houthis in Yemen seized the crucial Red Sea city of Mocha, expanding its control over the strategic Bab al-Mandeb Strait. This comes as shipping traffic through the Strait of Hormuz remains restricted due to the US-Iran standoff and continues…
The dollar held near its highest levels of the past week and the yen slipped for a second day at the start of Asian trading on Friday as renewed fears of energy supply disruptions in the Middle East pushed up bond yields and oil prices.The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 99.081, holding steady after gaining 0.3% on Thursday to reach its highest level since September 7. The rise followed the release of data showing U.S. producer prices increased 0.4% in August, meeting market expectations as energy prices rebounded…
The Australian Dollar ended Thursday’s session with a 0.80% loss against the US Dollar after US producer inflation exceeded estimates, triggering pricing for a more hawkish Federal Reserve. The AUD/USD trades at 0.7159 after reaching a peak of 0.7223.AUD/USD rally fizzles as investors expect hawkish Fed on hot PPIUS August PPI data was 0.4% MoM as expected, driven by the jump in energy prices. Excluding volatile items, the so-called core undershoot estimates rose 0.2% MoM. The outlier was the annual PPI headline, overshooting forecasts of a 5.3% increase to 5.4%.So far, money markets have priced in a 71% chance that…
USD/CAD pares earlier gains on Thursday as the US Dollar (USD) loses momentum after staging a modest recovery, despite US Producer Price Index (PPI) data showing that producer inflation picked up again in August. At the same time, higher Oil prices offer support to the Canadian Dollar (CAD). At the time of writing, the pair trades around 1.3815 after reaching an intraday high of 1.3835.The US Producer Price Index (PPI) rose 0.4% MoM in August, matching market expectations and accelerating from the 0.1% increase recorded in July. Annual producer inflation climbed to 5.4%, slightly above the 5.3% forecast and up…
Kolkata: The Reserve Bank of India will hold a 26-day variable rate reverse repo auction on Friday with a target to drain out Rs 5 lakh crore from the inter-bank market which is flush with excess liquidity.Announcing the auction Thursday, the regulator said that participants in the auction will have an option to withdraw the amount lent.The RBI is holding longer-term VRRR to absorb durable liquidity, besides holding overnight VRRR to manage the excess flow of funds, on account of the overseas inflows through the special dollar-mobilisation scheme.As on Thursday, the inter-bank had a surplus liquidity of Rs 10.5 lakh…