Following sporadic market closures in India...>

INDIA: Following sporadic market closures in India yesterday, (some equity

indices were open, USD/INR was shut) the currency opened weaker, reacting to

Monday's announcement from the RBI that they are to hold another another $5bln

USD/INR swap auction on April 23rd, a fortnight or so following the beginning of

the general election (final results are due May 23rd). This operation may ease

concerns over fiscal year-end liquidity issues but has raised speculation that a

third auction could coincide with the end of elections in May to quash any

liquidity issues surrounding the event.

-Nonetheless, USD/INR reversed the opening gains to fall through the Friday lows

with little difficulty, but the YTD lows look out of reach for now at 68.35.

Today's dip lower does, however, follow the charting of a death cross (50-dma <

200-dma), which may signal another leg lower in the pair.

-Firm Indian sovereign bonds helped lift INR Tuesday, with markets turning focus

to Thursday's RBI rate decision. The bank is expected to trim both the repo rate

and reverse repo rate by 25bps apiece to 6.0% and 5.75% respectively.