USD/INR respected the recent range............>

INDIA: USD/INR respected the recent range Wednesday, closing at 68.8750, and

failed to pick up any material momentum in either direction. Markets continue to

digest the FX swap auction earlier in the week, with investors waiting for any

signals from the RBI on whether the operation will be the first of many, or a

one-off ahead of general elections (and fiscal year-end) due in April. Analysts

remain split over whether further FX swap auctions will be forthcoming, but it's

likely the RBI would be forced to make a decision on the ops sooner rather than

later should recent INR strength persist.

-NSE data (one day ahead of NSDL data) today showed both domestic and global

funds were net buyers of Indian equities and bonds but the flow failed to

materially underpin the INR with onshore liquidity still so high following the

RBI operations. Others cited the continued suppression of US bond yields as

helping boost global bond prices, thereby flattening the belly of the Indian

sovereign curve. India's 4yr yield hit fresh cycle lows of 6.85% today, the

lowest since December 2017.