Gold Silver Reports – RBI Expected To Intervene To Prevent Sharp Drop In Rupee (₹) — The focus will undoubtedly be on theRupee (₹) which hit a record low on Thursday, falling past 69 a dollar and set for its worst quarter in five years.
Rising crude oil prices is expected to widen the nation’s current account deficit and stoke inflationary pressures. Oil, India’s biggest importitem, is poised for the biggest weekly gain since mid-April as declining stockpiles in the U.S. and disruptions in Libya and Canada raised global supply risks.
Traders expect the RBI to intervene and prevent a sharp drop in the local currency. But that intervention is likely to cause liquidity to tighten in the money-market and cause short rates to rise. The Rupee (₹) fell 0.2 percent to close at 68.7925 on Thursday and forwards suggest it may start trading at 68.81 on Friday.
Meanwhile, the yield on the 10-year bond rose 6 basis points to 7.94 percent on Thursday and was headed for a fourth quarter of gains. The RBI will auction ₹ 12,000 crore of government bonds and that will test investor appetite in an environment of tightening liquidity. – Neal Bhai Reports
