INSUBCONTINENT EXCLUSIVE:
Bond yields have dropped in each of the last five weeks and in eight out of the last 10India's benchmark 10-year bond yield posted its
fifth straight weekly fall, while the rupee rose sharply in late trade to its highest level since end March on dollar sales by foreign banks
and an uptick in domestic shares
Treasury yields also helped
On the week, the unit rose 0.6 per cent, posting its fourth straight week of gains
"In India the improving trend of moderation in daily new Covid cases is boosting risk sentiment," said Rahul Gupta, head of currency
research at Emkay Global Financial Services."FX traders will monitor the Covid situation and trend in the dollar, and keep the spot rupee
within 72.50-73.50 with a negative bias," he added India reported 259,551 new coronavirus infections over the last 24 hours on Friday, while
but some position cutting was seen post results
Bond yields have dropped in each of the last five weeks and in eight out of the last 10, as the RBI actively intervened in the market,
conducted open market purchases and cancelled auctions to ensure yields remain capped.Lower yields are critical to ensure the government's
borrowing cost is curtailed as it looks to borrow a massive Rs 12.06 lakh crore in 2021/22
The RBI wants to cap the benchmark 10-year bond yield at six per cent, local media Informist reported earlier in the day, citing an unnamed
senior banking official."Half the stock (of 10-year bonds) is with the RBI and they have made the market realise that they will buy below
income at Tata Asset Management."The RBI will be able to control yields at least for this financial year
the rupee has also added to rupee liquidity in the market but traders expect the central bank to try and keep the local currency stable
between 72.50 and 75 levels.Asian currencies rose on Friday but a recent poll showed bearish bets rising on several Asian units as
increasing COVID-19 cases have prompted lockdowns in several countries
Investors, however, turned bullish on the Indian rupee for the first time in more than two months.
