Liquidity Monitor

•  In the recent FOMC meeting, the Federal Reserve maintained rates at 3.50%- 3.75%, as a resilient economy and steady labour market continued to be weighed against inflation that remains above the 2% target. Over the week, market remained volatile. 

• Brent crude fell from ~US$91/bbl to ~US$86/bbl during the week, while FPI inflows into FAR bonds remained cautious due to uncertainty around Bloomberg index inclusion. 

• Despite geopolitical tensions and pressure on the rupee, robust overseas inflows of nearly $40 billion since June have helped bolster India's external buffers. 

• The Sovereign Curve remained range-bound within 2-8 bps as strong foreign inflows and improving external buffers helped offset the impact of global geopolitical risks and elevated crude oil prices 

• The 10-year benchmark Government of India bond yield is expected to trade in the 6.75%–6.90% range in the near term.

Indian Debt Market Indicators

Inflow/ Outflow