India bonds gain as RBI FX inflows lift liquidity, spur short-term debt buying
MUMBAI: Indian government bonds rose in early trade on Thursday, led by the shorter-duration papers, after larger-than-expected dollar inflows under the central bank’s special schemes boosted rupee liquidity and improved sentiment for Indian assets. The yield on the benchmark 6.94% 2036 bond was at 6.9502% as of 10:30 a.m. IST, after closing at 6.9754% on Wednesday. The five-year 6.36% 2031 bond yield dropped 8 bps to 6.48%. India attracted a much larger-than-expected $136.38 billion through special foreign-currency mobilisation schemes, strengthening its ability to support the rupee while adding to domestic liquidity. Indian banks raised $127.23 billion through non-resident foreign-currency deposits, with additional inflows coming through external commercial borrowings and overseas foreign-currency borrowings. The majority of these funds would remain in the system for three to five years and could boost demand for five-year securities, especially from foreign banks with limited retail lending operations, traders said. India’s banking system liquidity surplus jumped to 9.7 trillion rupees ($102.76 billion) as most banks have swapped their dollars inflow with the central bank. Kotak
MUMBAI: Indian government bonds rose in early trade on Thursday, led by the shorter-duration papers, after larger-than-expected dollar inflows under the central bank’s special schemes boosted rupee liquidity and improved sentiment for Indian assets. The yield on the benchmark 6.94% 2036 bond was at 6.9502% as of 10:30 a.m. IST, after closing at 6.9754% on Wednesday. The five-year 6.36% 2031 bond yield dropped 8 bps to 6.48%. India attracted a much larger-than-expected $136.38 billion through special foreign-currency mobilisation schemes, strengthening its ability to support the rupee while adding to domestic liquidity. Indian banks raised $127.23 billion through non-resident foreign-currency deposits, with additional inflows coming through external commercial borrowings and overseas foreign-currency borrowings. The majority of these funds would remain in the system for three to five years and could boost demand for five-year securities, especially from foreign banks with limited retail lending operations, traders said. India’s banking system liquidity surplus jumped to 9.7 trillion rupees ($102.76 billion) as most banks have swapped their dollars inflow with the central bank. Kotak
