Last Friday, the Indian rupee showcased its resilience, gaining 16 paise against the US dollar and finishing the trading day at 82.93, a welcome shift from the previous day’s closing rate of 83.09.
JPMorgan revealed plans to include India in the emerging market bond index. This news generated considerable excitement, as it hinted at the potential influx of billions of dollars into the Indian economy. Consequently, the Indian rupee opened the day 27 paise higher against the US dollar, starting at 82.82 instead of the previous day’s closing rate of 83.09. Additionally, the 7.18% 2033 Government Bond yield saw a positive start at 7.08%, down from the previous day’s closing figure of 7.14%.
A Ten-Month Journey to $24 Billion Inflows
According to the latest business news update, the US dollar index soared to 105.74 on Thursday, reaching its highest level in over half a year. Simultaneously, the US 10-year Treasury yield surged to 4.50%, its loftiest point since 2007. These developments were driven by expectations of the US Federal Reserve maintaining higher interest rates. As a result, the rupee experienced a minor depreciation, closing the day 2 paise lower at 83.09.
However, the headline-grabbing news came from JPMorgan, which announced the inclusion of Indian government bonds in the Government Bond Index-Emerging Markets index. This inclusion is set to commence on June 28, 2024, spanning ten months with 1% increments on its index weighting. India is projected to reach the maximum weighting of 10%, according to JPMorgan. Market experts anticipate that this index inclusion could trigger around $24 billion in inflows into eligible government bonds from the start of next year until May 2025.
Yet, the surge in crude oil prices provided a counterbalance to the rupee’s gains. Brent crude oil futures experienced a 0.9% uptick, reaching $94.12, reflecting an 8% increase for the month. Additionally, in Asia, the 10-year U.S. yield scaled to a 16-year high of 4.50%.
Delta Corp subsidiaries, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, also received notices for Rs. 5,682 crore. Furthermore, the company faced a notice demanding Rs. 11,140 crore in alleged tax liability, along with interest and penalties, as per world news now. Failure to comply could result in a show-cause notice.
