Indian Central Bank to Inject 1.3 Billion to Curb Rupee Decline

India’s central bank has said that it will inject 80bn rupees ($1.3bn; £806m) into the country’s banking system by buying long-term government bonds.

It comes just days after the central bank tightened the money supply in an attempt to stem the rupee’s decline.

The move is expected to make more credit available and also bring down borrowing costs for the government.

On Tuesday, the bond yield or the cost of borrowing on India’s 10-year bonds touched 9.48%, the highest since 2001.

The Reserve Bank of India (RBI) said that it was “important to ensure that the liquidity tightening does not harden longer term yields sharply and adversely impact the flow of credit to the productive sectors of the economy”.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza