Latest news with #JaspreetKalra
Yahoo
08-07-2025
- Business
- Yahoo
Rupee inches up tracking regional peers, spotlight stays on tariffs
By Jaspreet Kalra MUMBAI (Reuters) - The Indian rupee posted modest gains on Tuesday, tracking strength in regional peers, as markets looked past the White House's tariff letters and instead took solace in the deadline extension to August 1 that leaves room for deals to be struck. The rupee closed at 85.6950 against the U.S. dollar, up about 0.2% from its close at 85.85 in the previous session. Market reaction to U.S. President Donald Trump dispatching letters to 14 trading partner with sharply higher tariffs on imports into the United States was largely muted, with most regional equities and currencies gaining on Tuesday. For instance, while South Korea received a letter declaring a 25% tariff, the won rose 0.7% against the dollar and the KOSPI 200 index gained nearly 2%, logging its best day in two weeks. India's benchmark equity indexes logged modest gains as well. Local equities have largely kept pace with a regional stock gauge since U.S. reciprocal tariffs were announced on April 2, but the rupee has underperformed emerging market peers despite broad weakness in the dollar. "The market seems to be taking the view that nothing is final and that these letters merely mark another iteration on the journey towards a trade deal," ING said in a note. The local currency was supported by modest interbank dollar sales on the day alongside positive cues from gains in regional currencies, a trader at a private bank said. Traders reckon that the rupee is likely to stick to rangebound price action in the near-term but the announcement of a trade deal with U.S. could open room for a rise towards 85. Meanwhile, dollar-rupee forward premiums retreated as traders trimmed wagers on rate cuts by the U.S. Federal Reserve. The 1-year dollar-rupee implied yield declined 4 basis points to 1.95%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-07-2025
- Business
- Yahoo
India's $700 billion plus FX reserve pile, leaner forward book bolster rupee shield
By Nimesh Vora and Jaspreet Kalra MUMBAI (Reuters) -India's foreign exchange reserves topped $700 billion last week to hit a 9-month high, which, alongside the central bank's shrinking forward book, cements the rupee's defences at a time when U.S. trade policy uncertainty looms, analysts said. Economists assess the Reserve Bank of India's (RBI) capacity to intervene in the foreign exchange market by evaluating its foreign exchange reserves and forward book positions, both of which are on a healthy trajectory. India's foreign exchange reserves rose to $702.8 billion as of June 27, up $4.9 billion week-on-week, as per data released on Friday. The reserves had declined to a multi-month low of $624 billion in late January but have now recovered to within touching distance of their all-time high hit last year. At the same time, the RBI's short-dollar position in the forward market, which had risen to a record $88.7 billion in February, declined to $65.2 billion by May. The data is released with a one-month lag. Substantial short positions in the forward dollar book offset some of the cushion offered by headline FX reserves, since they imply future commitments that could drain the reserves. The RBI's forward book shrank by $19 billion over April and May, while its net dollar selling during the same period was just $3.2 billion. This suggests the RBI is allowing a portion of the forward book to unwind and is offsetting the impact on rupee liquidity and FX reserves by purchasing dollars in the spot market, said Gaura Sen Gupta, an economist at IDFC First Bank. "The reduction in forward book size and sufficient FX reserves are a positive for the INR. It increases the RBI's ability to intervene if required," Sen Gupta said. The RBI intervenes in foreign exchange markets to curb excessive volatility. The central bank did not respond to an email seeking comment. The rupee is among emerging market currencies that have experienced heightened volatility since April 2, when U.S. President Donald Trump announced sweeping tariffs, only to pause the steep hikes for 90 days. U.S. and Indian trade negotiators are pushing to finalise a trade deal before the July 9 deadline, and a failure could heighten volatility for the rupee. A change in the composition of the RBI's forward book towards more onshore positions than non-deliverable forwards is one more positive for the rupee, according to analysts. Positions in the non-deliverable forward market, unlike their onshore counterparts, are typically concentrated in near-tenors and need to be rolled over frequently, adding to volatility. This shift "reduces the pressure on the RBI to unwind the short dollar positions very aggressively," Abhishek Upadhyay, an economist at ICICI Securities Primary Dealership, said in a note. "Any decision to unwind the book should be based on balance of payment flows to ensure optics of FX reserves is managed well."
Yahoo
04-07-2025
- Business
- Yahoo
India's rising FX reserves, leaner forward book bolster rupee shield
By Nimesh Vora and Jaspreet Kalra MUMBAI (Reuters) -India's climbing foreign exchange reserves and the central bank's shrinking forward book are cementing the rupee's defences at a time when U.S. trade policy uncertainty looms over the economy and markets, analysts said. Economists assess the Reserve Bank of India's (RBI) capacity to intervene in the foreign exchange market by evaluating its foreign exchange reserves and forward book positions, both of which are on a healthy trajectory. India's forex reserves have been rising after slipping to a multi-month low of $624 billion in late January, and are poised to cross the $700 billion mark when the latest data is released later on Friday, as per estimates by two economists, based on central bank balance sheet data. At the same time, the RBI's short-dollar position in the forward market, which had risen to a record $88.7 billion in February, declined to $65.2 billion by May. The data is released with a one-month lag. Substantial short positions in the forward dollar book offset some of the cushion offered by headline FX reserves, since they imply future commitments that could drain the reserves. The RBI's forward book shrank by $19 billion over April and May, while its net dollar selling during the same period was just $3.2 billion. This suggests the RBI is allowing a portion of the forward book to unwind and is offsetting the impact on rupee liquidity and FX reserves by purchasing dollars in the spot market, said Gaura Sen Gupta, an economist at IDFC First Bank. "The reduction in forward book size and sufficient FX reserves are a positive for the INR. It increases the RBI's ability to intervene if required," Sen Gupta said. The RBI intervenes in foreign exchange markets to curb excessive volatility. The central bank did not respond to an email seeking comment. The rupee is among emerging market currencies that have experienced heightened volatility since April 2, when U.S. President Donald Trump announced sweeping tariffs, only to pause the steep hikes for 90 days. U.S. and Indian trade negotiators are pushing to finalise a trade deal before the July 9 deadline, and a failure could heighten volatility for the rupee. A change in the composition of the RBI's forward book towards more onshore positions than non-deliverable forwards is one more positive for the rupee, according to analysts. Positions in the non-deliverable forward market, unlike their onshore counterparts, are typically concentrated in near-tenors and need to be rolled over frequently, adding to volatility. This shift "reduces the pressure on the RBI to unwind the short dollar positions very aggressively," Abhishek Upadhyay, an economist at ICICI Securities Primary Dealership, said in a note. "Any decision to unwind the book should be based on balance of payment flows to ensure optics of FX reserves is managed well." Sign in to access your portfolio
Yahoo
04-07-2025
- Business
- Yahoo
India's rising FX reserves, leaner forward book bolster rupee shield
By Nimesh Vora and Jaspreet Kalra MUMBAI (Reuters) -India's climbing foreign exchange reserves and the central bank's shrinking forward book are cementing the rupee's defences at a time when U.S. trade policy uncertainty looms over the economy and markets, analysts said. Economists assess the Reserve Bank of India's (RBI) capacity to intervene in the foreign exchange market by evaluating its foreign exchange reserves and forward book positions, both of which are on a healthy trajectory. India's forex reserves have been rising after slipping to a multi-month low of $624 billion in late January, and are poised to cross the $700 billion mark when the latest data is released later on Friday, as per estimates by two economists, based on central bank balance sheet data. At the same time, the RBI's short-dollar position in the forward market, which had risen to a record $88.7 billion in February, declined to $65.2 billion by May. The data is released with a one-month lag. Substantial short positions in the forward dollar book offset some of the cushion offered by headline FX reserves, since they imply future commitments that could drain the reserves. The RBI's forward book shrank by $19 billion over April and May, while its net dollar selling during the same period was just $3.2 billion. This suggests the RBI is allowing a portion of the forward book to unwind and is offsetting the impact on rupee liquidity and FX reserves by purchasing dollars in the spot market, said Gaura Sen Gupta, an economist at IDFC First Bank. "The reduction in forward book size and sufficient FX reserves are a positive for the INR. It increases the RBI's ability to intervene if required," Sen Gupta said. The RBI intervenes in foreign exchange markets to curb excessive volatility. The central bank did not respond to an email seeking comment. The rupee is among emerging market currencies that have experienced heightened volatility since April 2, when U.S. President Donald Trump announced sweeping tariffs, only to pause the steep hikes for 90 days. U.S. and Indian trade negotiators are pushing to finalise a trade deal before the July 9 deadline, and a failure could heighten volatility for the rupee. A change in the composition of the RBI's forward book towards more onshore positions than non-deliverable forwards is one more positive for the rupee, according to analysts. Positions in the non-deliverable forward market, unlike their onshore counterparts, are typically concentrated in near-tenors and need to be rolled over frequently, adding to volatility. This shift "reduces the pressure on the RBI to unwind the short dollar positions very aggressively," Abhishek Upadhyay, an economist at ICICI Securities Primary Dealership, said in a note. "Any decision to unwind the book should be based on balance of payment flows to ensure optics of FX reserves is managed well." Sign in to access your portfolio
Mint
03-07-2025
- Business
- Mint
Inflows boost rupee to one-month high; trade deal optimism aids sentiment
MUMBAI, July 3 (Reuters) - The Indian rupee touched its strongest level in a month on Thursday, lifted by dollar sales from foreign banks and cutting of bearish bets on the local currency, while optimism surrounding a U.S.-India trade deal also aided sentiment. The rupee rose to a peak of 85.20, its best level since late May, before ending the session at 85.31, up 0.4% on the day. Dollar sales from foreign banks in the latter half of Thursday's session boosted the rupee, with the rise above 85.40 also triggering stop-losses on some wagers against the currency, traders said. Asian currencies mostly rose, while the dollar index remained steady ahead of a key U.S. labour market report. Most stock indices in Asia also gained on Thursday, after U.S.-Vietnam trade discussions raised the possibility of breakthroughs for other countries in the region ahead of the July 9 tariff deadline. India's benchmark equity indexes though closed marginally lower. U.S. and India trade negotiators were pushing on Wednesday to try to land a tariff-reducing deal ahead of President Donald Trump's July 9 negotiating deadline, per sources familiar with the talks. "Given the U.S.-Vietnam trade deal and the looming July 9 deadline for the reciprocal tariff pause, markets are also alert to similar trade announcements with India and the European Union," DBS said in a Thursday note. Traders reckon a trade deal with India could push the rupee above 85, but further gains would depend on foreign inflows and if the central bank steps in shore up its FX reserves via dollar purchases. On the day, investors will also keep an eye on the U.S. non-farm payrolls report for cues on the future path of the Federal Reserve policy rates. Economists polled by Reuters expect that the U.S. economy added 110,000 jobs in June, while the unemployment rate ticked up to 4.3%. (Reporting by Jaspreet Kalra; Editing by Vijay Kishore)
