India’s rupee surges amid RBI’s $9 billion bond purchase
By: cryptopolitan|2025/05/05 17:15:01
0
Share
The rupee closed at 84.58 on Friday in Mumbai, rising 1% in one week after a mix of portfolio inflows, strength across regional currencies, and a heavy dose of bond buying by the Reserve Bank of India.The RBI confirmed plans to buy 750 billion rupees in government bonds this week—around $8.88 billion. That move triggered a shift in the bond market and helped the rupee push past 84, although importer hedging and likely dollar-buying by the central bank stopped it from going further.According to Reuters, traders said the USD/INR pair has likely bottomed out and may trade between 83.80 and 85 in the short term. One trader at a foreign bank reportedly explained that the RBI is expected to step in whenever the dollar drops below 84 rupees, adding that the central bank wants to build up reserves, which hit a six-month high of $688 billion on April 25 after climbing for eight straight weeks.RBI lowers yields with heavy bond purchasesIndia’s 10-year bond yield ended Friday at 6.3538%, down 1 basis point from the previous week. That marked the seventh week in a row of declines, totaling a drop of 35 basis points. Traders expect yields to stay between 6.30% and 6.40%, but said that may change depending on updates in India-Pakistan tensions and the outcome of the upcoming US Federal Reserve meeting on May 7.The central bank has already bought 3.65 trillion rupees of bonds through open market operations (OMOs) so far in 2025. On top of that, it picked up another 388 billion rupees through secondary market purchases.That trend will continue with the $8.88 billion bond purchase this week, followed by two smaller ones of 250 billion rupees each later in May.Radhika Rao, senior economist and executive director at DBS Bank, said this injection could help with “policy transmission and support growth amid global uncertainties.” Radhika also said the move may be aimed at absorbing the liquidity loss expected from maturing dollar-forward contracts over the next three months.Investors track Fed decision, PMIs, and trade dataMarket attention is also on the US jobs report, which came in stronger than expected. That pushed the US dollar higher against most major currencies on Friday. Traders said the strength in the dollar added pressure to the rupee and other Asian currencies ahead of the Fed’s next decision.The Federal Reserve is expected to keep interest rates unchanged, but analysts are watching Jerome Powell’s comments closely. His tone will be key in figuring out where the US economy is headed next. The uncertainty comes as tariff policies continue to reshape trade.India’s traders are also keeping an eye on a potential US-India trade agreement and how border tensions develop. All of this plays into the rupee’s direction this week.Swap traders are waiting for clarity. India’s overnight index swap rates are expected to stay steady at the start of the week. But the one-year, two-year, and five-year swap rates have all dropped sharply over the last five weeks. Traders said they could fall further depending on what the Fed announces.Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
You may also like

IOSG: Making Probability an Asset, Forecasting Market Intelligence Agent
Predictive Market Oracle will begin to take shape in early 2026, poised to become a nascent product in the oracles space over the next year.

The US’s Back-Channel Helper in Attacking Iran, How Evil is Palantir
Palantir has once again used data to validate that unsettling logical loop: War is its best business development strategy

Key Market Intelligence on March 3rd, how much did you miss?
1. On-chain Volume: $34.0M USD inflow to Hyperliquid today; $29.3M USD outflow from Arbitrum
2. Biggest Gainers and Losers: $FAI, $ARC
3. Top News: Today, the crypto market rebounded against the trend, with a macro hedge whale holding long positions in gold and silver and shorting crypto, resulting in a $500k USD loss for the day

Interpreting the Anthropic vs. War Department Conflict: What Does Trump Intend to Do?
In the coming decades, our freedom may be more fragile than we think

Nasdaq Moves In, Predicts Market Has Reached Mainstream Inflection Point
Predictive trading is no longer just an experiment in the crypto space or a niche market but is starting to be integrated into the product suite of traditional trading platforms.

After a 48-hour ban, Claude reached the top of the App Store
Just the day before, ChatGPT was sitting right there

If this is the beginning of the triple halving, what are top investors saying about what to expect?
Hormuz Strait Blockade, Capital War, Oil and Bitcoin

After Iran's Political Risk Rises, Cryptocurrency Sees Massive Outflow
Following the airstrike, within minutes, Iran's largest cryptocurrency exchange, Nobitex, saw a 700% surge in cryptocurrency outflows.

Pantera Capital Partner: The Financial Trajectory of AI Agents
AI agents will move towards fully autonomous commerce, and blockchain is the only digital-native financial track that meets its needs for identity, micropayments, and trustless execution.

In the next 5 years, Vitalik will scale Ethereum like this
Short-Term vs Long-Term, Execution, Data vs State

Sam Altman and the End of the World Capitalism
The real danger is never AI itself, but those who believe they have the right to define the human destiny.

Wall Street Rings Inflation Alarm Bells Amid Iran Tensions, What Does It Mean for Cryptocurrency?
Interest rates have remained stubbornly high, posing a challenge to the cryptocurrency bull case.

Qwen Open Source Model Enters Mobile, Nasdaq Tests Water Prediction Market, What's the Overseas Crypto Community Talking About Today?
What Was the Hottest Topic Among Expats in the Last 24 Hours?

MegaETH Co-founder: 48 Hours After Escaping Dubai, I Reassess the Entire Crypto Scene
The global environment is not favorable to us, but in the long run, it may be favorable to us.

Morning Report | Strategy increased its holdings by 3,015 bitcoins last week; BitMine increased its holdings by 50,928 ETH last week; Vitalik elaborated on the Ethereum execution layer roadmap
March 2 Market Key Events Overview

Why is it said that there are structural opportunities in encrypted AI?
When centralized AI falls into the dilemma of regulation and trust, Crypto + AI will become a structural escape route for safeguarding data and sovereignty in a multipolar world.

Make Probability an Asset: A Forward-Looking Perspective on Predictive Market Agents
The predictive market agents are expected to present early prototypes in early 2026, likely becoming an emerging product form in the field of agents in the following year.

Consumer application issues
The truly outstanding applications will not ask people to "use cryptocurrency," but will provide practical and better solutions to the problems that people already face.
IOSG: Making Probability an Asset, Forecasting Market Intelligence Agent
Predictive Market Oracle will begin to take shape in early 2026, poised to become a nascent product in the oracles space over the next year.
The US’s Back-Channel Helper in Attacking Iran, How Evil is Palantir
Palantir has once again used data to validate that unsettling logical loop: War is its best business development strategy
Key Market Intelligence on March 3rd, how much did you miss?
1. On-chain Volume: $34.0M USD inflow to Hyperliquid today; $29.3M USD outflow from Arbitrum
2. Biggest Gainers and Losers: $FAI, $ARC
3. Top News: Today, the crypto market rebounded against the trend, with a macro hedge whale holding long positions in gold and silver and shorting crypto, resulting in a $500k USD loss for the day
Interpreting the Anthropic vs. War Department Conflict: What Does Trump Intend to Do?
In the coming decades, our freedom may be more fragile than we think
Nasdaq Moves In, Predicts Market Has Reached Mainstream Inflection Point
Predictive trading is no longer just an experiment in the crypto space or a niche market but is starting to be integrated into the product suite of traditional trading platforms.
After a 48-hour ban, Claude reached the top of the App Store
Just the day before, ChatGPT was sitting right there