INDIA RUPEE-All eyes on RBI in wake of rupee’s likely push higher, $5 bln swap maturity -March 10, 2024 at 11:01 pm EDT

MUMBAI, March 11 (Reuters) –

The Indian rupee’s likely rise at open on Monday and a $5
billion swap maturity will mean that all the focus will be on
the Reserve Bank of India, traders said.

Non-deliverable forwards indicate rupee will open
at 82.74-82.75 to the U.S. dollar compared to its previous close
of 82.7850.

The RBI’s $5 billion dollar/rupee sell/buy swap matures on
Monday. Reuters had previously reported that the central bank
will take delivery of the swap, which would take $5 billion out
of the system and inject proportionate rupee liquidity.

“Two things to watch for today”, an FX trader at a bank
said. “First off, whether RBI will again intervene and buy (in
spot) and then whether it will supply dollars (to counter the
swap maturity).”

The RBI may supply dollars if there is “a serious
dislocation” in the overnight swap rate, he said. It may
additionally opt to pay in the near forwards if it wants to
“make last” the dollar supply.

The rupee will be helped by a mostly soft dollar. The dollar
index was at 102.70, after dropping to a near two-month
low on Friday amid a fall in U.S. Treasury yields dented demand
for the dollar.

The closely watched U.S. jobs report out on Friday was
mixed. While the job additions for February surpassed
expectations, the January payrolls witnessed a significant
downward revision.

Further, the unemployment rate rose to a two-year high and
wage growth was softer than what economists had expected.

“Big downward revisions, weak wages and rising unemployment
suggest things are not quite as robust as the headline
indicates,” ING Bank said in a note.

Federal Reserve rate cut expectations through 2024 are now
at just below 100 basis points. At one point last week, they
were at near 80 bps.

KEY INDICATORS:

** One-month non-deliverable rupee forward at
82.80

** Dollar index up at 102.7

** Brent crude futures down 0.8% at $81.5 per barrel

** Ten-year U.S. note yield at 4.07%

** As per NSDL data, foreign investors bought a net $685.6
mln worth of Indian shares on March 6

** NSDL data shows foreign investors bought a net $276.4 mln
worth of Indian bonds on March 6
(Reporting by Nimesh Vora; Editing by Varun H K)