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Yields are lower in early trade after rising through the session yesterday. RBI Governor Das delivered a speech and laid out that the economic recovery was strong before the second wave of the virus and emphasised that India will continue to fight the situation using all instruments available saying actions need to be swift and wide ranging.

  • Das also noted the second GSAP operation for INR 350bn will be on May 20. The first operation, for INR 250bn, was largely ineffective with participants saying the bank targeted the wrong maturities. The Governor has been meeting with bankers and other lenders since last week to discuss the economic situation. Markets also await PMI Services figures. Focus remains on the coronavirus situation, with many experts now saying that things are likely to get worse before they get better.
  • Highlights of RBI Governor Das speech:
  • India was in foothills of strong recovery end-fy21
  • India fighting infections and mortalities
  • RBI will continue to monitor situation; will deploy all instruments
  • India needs swift-footed, wide ranging actions
  • Outlook highly uncertain, clouded with downside risks
  • CPI inflation remains benign for major adv economies; India core inflation is elevated
  • India supply condition underpinned by agriculture sector
  • Dent to India aggregate demand may be moderate; consumption demand holding up
  • Disruption in manufacturing is minimum