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IPOs Could Put Upward Pressure On INR

INDIA

Bonds were supported yesterday thanks to a sharp drop in oil prices, also supporting the short end is the choice of bonds included in the RBI's next INR 250bn GSAP purchase operation on Aug 12. Bonds eligible for purchase are the 5.63% 2026, 7.17% 2028, 7.26% 2029, 7.61% 2030, 7.95% 2032.

  • Yields fell yesterday for the first time in four sessions, the RBI maintained its dovish tone last week ut extension of the VRRR programme indicates the bank is uncomfortable with large amounts of liquidity and is looking to start to normalize liquidity levels.
  • Elsewhere, INR could see some upward pressure on more high profile IPO's this week. Nuvoco Vistas, Cartrade Tech, Chemplast and Aptus Value Housing all IPO this week. Exchange data showed global funds bought a net INR 2.12bn of Indian stocks on Monday.
  • Markets look ahead to industrial production and CPI data due tomorrow, today's INR 116n state debt sale will also be eyed.

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