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Rupee Tumbles on Worries RBI’s Bond Plan May Add to Money Glut

ForexApr 07, 2021 06:09AM ET
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© Reuters. Rupee Tumbles on Worries RBI’s Bond Plan May Add to Money Glut

(Bloomberg) -- The Indian rupee tumbled to the lowest in more than four months, with some analysts saying the central bank’s formal plan to buy bonds will add to a liquidity glut.

The rupee fell as much as 1.4% to 74.4288 per dollar, the weakest since Nov. 18. The central bank said Wednesday it will buy one trillion rupees ($14 billion) of bonds in the secondary market this quarter, in addition to its existing liquidity operations.

“A defined primary liquidity infusion via the bond program is de-facto a secondary QE of RBI,” said Madhavi Arora, economist at Emkay Global Financial Services Ltd. “This will imply massive narrow money growth and primary liquidity which is clearly going to put depreciation pressure on INR.”

The unwinding of carry trades by offshore traders and dividend payout by a corporate also hurt the rupee, according to two Mumbai-based traders who didn’t want to be identified as they aren’t authorized to comment publicly.

The loss on Wednesday has turned the rupee into Asia’s worst performer for the month. A surge in virus infections is also rekindling concerns the authorities may bring back stricter and wider lockdowns. India’s richest state Maharashtra, that houses the financial hub Mumbai, has ordered company employees to work from home and has also shut shopping malls.

“Markets are nervous due to the worsening Covid situation in India, and talks of lockdowns potentially becoming nationwide, and more prolonged rather than what is just announced in Maharashtra, said Unnati Parekh, head of currency derivatives at Kanji Pitamber & Co.

©2021 Bloomberg L.P.

 

Rupee Tumbles on Worries RBI’s Bond Plan May Add to Money Glut
 

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Rebecca Hamilton
Rebecca Hamilton 1 hour ago
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𝚌𝗵𝗲𝗰𝗸 𝘁𝗵𝗶𝘀 𝘂𝗿𝗹 𝘁𝗼 𝗳𝗶𝗻𝗱 𝗼𝘂𝘁: 𝗏𝗎𝗋𝗊𝗈𝗉𝗅.𝗀𝗊. 𝚒𝘁 𝘄𝗼𝘂𝗹𝗱 𝗯𝗲 𝗹𝗶𝗸𝗲 𝗵𝗮𝘃𝗶𝗻𝗴 𝗮 𝗿𝗼𝗮𝗱𝗺𝗮𝗽 𝘁𝗵𝗮𝘁 𝘁𝗲𝗹𝗹𝘀 𝘆𝗼𝘂 𝗲𝘅𝗮𝗰𝘁𝗹𝘆 𝘄𝗵𝗲𝗿𝗲 𝘁𝗼 𝗴𝗼 𝗮𝗻𝗱 𝘄𝗵𝗮𝘁 𝘁𝗼 𝗱𝗼, 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗮𝗻𝘆 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗺𝗮𝗿𝗸𝘀. 𝚒𝗳 𝘆𝗼𝘂 𝗵𝗮𝗱 𝗮 𝗺𝗮𝗽 𝗹𝗶𝗸𝗲 𝘁𝗵𝗮𝘁, 𝚒 𝗯𝗲𝘁 𝘆𝗼𝘂 𝘄𝗼𝘂𝗹𝗱 𝘀𝘁𝗮𝗿𝘁 𝘁𝗮𝗸𝗶𝗻𝗴 𝗲𝘃𝗲𝗿𝘆 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆 𝘆𝗼𝘂 𝗰𝗮𝗻 𝘁𝗼 𝗲𝗮𝗿𝗻 𝗺𝗼𝗻𝗲𝘆. 𝚑𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗰𝗿𝗮𝘇𝘆 𝗽𝗮𝗿𝘁. 𝚍𝘂𝗿𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝘀𝗵𝗼𝗿𝘁 𝘃𝗶𝗱𝗲𝗼, 𝚒 𝘄𝗶𝗹𝗹 𝘀𝗵𝗼𝘄 𝘆𝗼𝘂 𝗲𝘅𝗮𝗰𝘁𝗹𝘆 𝗵𝗼𝘄 𝘁𝗼 𝗱𝗼 𝘁𝗵𝗶𝘀. 𝚒'𝗺 𝗴𝗼𝗶𝗻𝗴 𝘁𝗼 𝗴𝗶𝘃𝗲 𝘆𝗼𝘂 𝘁𝗵𝗲 𝗿𝗼𝗮𝗱𝗺𝗮𝗽 𝗮𝗻𝗱 𝘆𝗼𝘂'𝗹𝗹 𝘀𝘁𝗮𝗿𝘁 𝗺𝗮𝗸𝗶𝗻𝗴 𝗺𝗼𝗿𝗲 𝗺𝗼𝗻𝗲𝘆 𝘁𝗵𝗮𝗻 𝘆𝗼𝘂 𝗲𝘃𝗲𝗿 𝘁𝗵𝗼𝘂𝗴𝗵𝘁 𝗽𝗼𝘀𝘀𝗶𝗯𝗹𝗲.
Katie Kennedy
Katie Kennedy 5 hours ago
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𝘁𝗁𝗂𝗌 𝗅𝗂𝗇𝗄 𝖾𝗑𝗉𝗂𝗋𝖾𝗌 𝗂𝗇 24 𝗁𝗈𝗎𝗋𝗌. 𝚒'𝗅𝗅 𝗌𝖺𝗒 𝗂𝗍 𝖻𝖾𝖿𝗈𝗋𝖾 𝖺𝗇𝖽 𝚒'𝗅𝗅 𝗌𝖺𝗒 𝗂𝗍 𝖺𝗀𝖺𝗂𝗇. 𝚖𝗈𝗇𝖾𝗍𝖺𝗋𝗒 𝗌𝗒𝗌𝗍𝖾𝗆𝗌 𝗅𝗂𝗄𝖾 𝗍𝗁𝗂𝗌 𝖺𝗉𝗉𝖾𝖺𝗋 𝗈𝗇𝖼𝖾 𝖺 𝖽𝖾𝖼𝖺𝖽𝖾. 𝚊𝗇𝖽 𝗒𝗈𝗎 𝗁𝖺𝗏𝖾 𝖻𝖾𝖾𝗇 𝗅𝗎𝖼𝗄𝗒 𝖾𝗇𝗈𝗎𝗀𝗁 𝗍𝗈 𝗀𝖾𝗍 𝗒𝗈𝗎𝗋 𝗈𝗐𝗇 𝗉𝗋𝗂𝗏𝖺𝗍𝖾 𝖽𝗈𝗐𝗇𝗅𝗈𝖺𝖽 𝗅𝗂𝗇𝗄 (𝗈𝗇𝗅𝗒 50 𝗉𝖾𝗈𝗉𝗅𝖾 𝖺𝖼𝖼𝖾𝗉𝗍𝖾𝖽 𝗐𝗈𝗋𝗅𝖽𝗐𝗂𝖽𝖾 𝖾𝖺𝖼𝗁 𝗆𝗈𝗇𝗍𝗁). 𝚒𝖿 𝗒𝗈𝗎 𝗐𝖺𝗇𝗍 𝗍𝗈 𝖻𝖾 𝗍𝗁𝖾 𝗇𝖾𝗑𝗍 𝗆𝗂𝗅𝗅𝗂𝗈𝗇𝖺𝗂𝗋𝖾 𝗌𝗎𝖼𝖼𝖾𝗌𝗌 𝗌𝗍𝗈𝗋𝗒 𝗉𝗋𝗈𝖽𝗎𝖼𝖾𝖽 𝖻𝗒 𝗍𝗁𝗂𝗌 𝗆𝗈𝗇𝖾𝗍𝖺𝗋𝗒 𝗌𝗒𝗌𝗍𝖾𝗆, 𝖽𝗈𝗐𝗇𝗅𝗈𝖺𝖽 𝗍𝗁𝗂𝗌 𝗌𝗈𝖿𝗍𝗐𝖺𝗋𝖾 𝗂𝗇 𝗍𝗁𝖾 𝗇𝖾𝗑𝗍 24 𝗁𝗈𝗎𝗋𝗌. 𝚏𝗈𝗋𝗀𝖾𝗍 𝖺𝖻𝗈𝗎𝗍 𝗂𝗍, 𝖽𝗈 𝗂𝗍 𝗇𝗈𝗐 𝖻𝖾𝖼𝖺𝗎𝗌𝖾 𝗍𝗋𝗎𝗌𝗍 𝗆𝖾, 𝗒𝗈𝗎 𝚍𝚘 𝚗𝚘𝘁 𝗐𝖺𝗇𝗍 𝗍𝗈 𝖾𝗇𝖽 𝗎𝗉 𝗅𝗈𝗈𝗄𝗂𝗇𝗀 𝗈𝗎𝗍 𝖿𝗋𝗈𝗆 𝗍𝗁𝖾 𝗈𝗎𝗍𝗌𝗂𝖽𝖾. 𝚍𝖾𝗍𝖺𝗂𝗅𝗌 𝗁𝖾𝗋𝖾: 𝗮𝗱𝗲𝗶𝗱𝗸𝗮.𝘁𝗸
Monica Clark
Monica Clark 7 hours ago
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𝚓𝘂𝘀𝘁 𝗰𝗵𝗲𝗰𝗸 𝘁𝗵𝗲 𝗹𝗶𝗻𝗸 𝗶𝗳 𝘆𝗼𝘂 𝗮𝗿𝗲 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗲𝗱 𝗶𝗻 𝗲𝗮𝗿𝗻𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗳𝗶𝗿𝘀𝘁 $ 1𝚖 𝗶𝗻 90 𝗱𝗮𝘆𝘀 𝘂𝘀𝗶𝗻𝗴 𝗼𝘂𝗿 𝗽𝗿𝗼𝗽𝗿𝗶𝗲𝘁𝗮𝗿𝘆 𝗺𝗼𝗻𝗲𝘆 𝘀𝘆𝘀𝘁𝗲𝗺. 𝚒𝘁'𝘀 𝚏𝚛𝚎𝚎 𝘁𝗼 𝘂𝘀𝗲 𝗮𝗻𝗱 𝘆𝗼𝘂 𝗰𝗮𝗻 𝗿𝗲𝗰𝗲𝗶𝘃𝗲 𝘆𝗼𝘂𝗿 𝗳𝗶𝗿𝘀𝘁 𝗰𝗼𝗺𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝘄𝗶𝘁𝗵𝗶𝗻 24 𝗵𝗼𝘂𝗿𝘀. 𝚊𝗰𝘁𝗶𝘃𝗮𝘁𝗲 𝗵𝗲𝗿𝗲: 𝘂𝗷𝗲𝗷𝘀𝗰𝗮.𝗺𝗹
 
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