By Mr. R. K. Gurumurthy
Fiscal deficit and gross borrowings are in line with pre-budget expectations. Additionally some part of borrowings within the gross borrowings is estimated to be raised overseas. So pressure on domestic liquidity is that much less. Indian rupee can gain a bit on the back of this development. However most of today's reactions could reverse as timing is key. Bond yields were expected to test 6.50% and today's low was close to that. Bias remains for softer yields this quarter.
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(The author of this article is in the Head Treasury of Lakshmi Vilas Bank)
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