Mumbai: India’s derivatives market for rate products is penciling in reductions in the cost of funds, beginning perhaps early 2024, even though the central bank has repeatedly stressed last week’s ‘pause’ in rate action applied to that policy review only. Overnight indexed swap (OIS) rates, used to hedge interest-rate risks in Asia’s third-biggest economy, are … Read more
– Traders of futures tied to the Federal Reserve‘s policy rate added to bets on Wednesday that the U.S. central bank will raise its benchmark rate to a range of 5.5%-5.75% by September, as a widely-followed report signaled some upward price pressures in manufacturing last month. The rate-futures contracts currently are pricing in a high … Read more
Mumbai: The Reserve Bank of India’s status quo on interest rate is becoming increasingly irrelevant, with the term premia – the difference between the policy repo rate and the yield on long-term benchmark bonds – rising to a 12-year high. The premium is nearly 3%, the highest since 2010. This is pushing up the borrowing … Read more