The liquidity impact of currency interventions is still in focus due to their effect on money market rates, as concerns about high government borrowing have kept government bond yields high.
On Monday, the rupee rose 0.5% to end the session at 91.5125 per dollar, its best daily gain since December 19. The yield on the 10-year benchmark bond rose as much as 8 basis points to 6.77%, the highest since March 2025.
In domestic equity markets, the benchmark BSE Sensex and Nifty 50 rose slightly over 1% each, recovering some of their losses from Sunday’s special trading session when the federal budget disappointed investors.
“The budget felt more like continuity than a surprise. It largely met expectations but did not introduce a new catalyst that would materially change the foreign flows story, especially at a time when inflows from emerging markets remain selective,” said Marc Velan, head of investments at Lucerne Asset Management in Singapore.
Foreign investors sold a net $4 billion worth of Indian stocks in January, with continued selling putting pressure on the rupee. Global markets were rocked Monday by a sustained sell-off in precious metals, forcing investors to set aside other assets to cover losses.
MSCI’s index of Asian shares outside Japan fell more than 2%, while futures also pointed to a tough start for Wall Street stocks.
#rupee #supported #RBI #intervention #swaps #ease #liquidity #bonds #sale