Indian rupee and benchmark bond yields held steady Thursday,as traders waited for Reserve Bank of India's rate decision due Friday. Rupee closed at 95.78,up slightly from 95.70,while 10-year bond yield stayed at 7%,barely moved from previous close of 7.01%.
Rupee moved between 95.59 and 95.80 throughout day . RBI intervention crucial in stopping further slide,especially after currency hit record low of 96.96 on May 20. Traders said RBI acted to keep rupee above 97 per dollar line .
Market mood cautious as participants awaited RBI's key announcements,possibly including currency support measures. Anil Bhansali,head of treasury at Finrex Treasury Advisors,noted wait-and-watch vibe,highlighting ongoing dollar demand from oil companies. This amid stalled Iran-U.S. peace talks.
One-month forward premium for rupee at 3.27%,down from 3.42%,while one-year forward premium rose to 3.02% from 2.90%. Analysts hint at possible capital gains tax cut on foreign investments in government bonds to boost market inflows.
As markets gear up for RBI's policy move,impact on currency and bond markets closely watched. Investors eye any central bank signals on rupee volatility and economic stability…
