• On Wednesday, the 10-year benchmark government bond (6.48% GS 2035) opened steady at 6.67%. • Over the day, 10Y point stayed range-bound. The sharp weakness in INR pushed the 10Y point higher, however market participants covered their short positions on speculation that RBI is purchasing gilts on-screen. • Indian rupee ended at a fresh record low of 91.74/$ owing to persistent dollar demand from foreign portfolio investors and importers amid the ongoing US-Europe trade tensions. However, INR pared losses on likely RBI intervention in FX market and ended at 91.70/$. • The 10Y point closed 2bps lower at 6.65% vs 6.67%. • The latest banking system liquidity stayed in surplus of ~INR 721.31 Bn. RBI conducted 8-day VRR for INR 500 Bn and was partially subscribed at 5.26%.
