RBI extends special forex windows for banks till December 31

After getting a good response to the double forex swap windows - aimed to shore up forex buffer and prop up the rupee - the Reserve Bank of India (RBI) has allowed banks to utilise the special window till December 31 to borrow forex against their core capital, but with riders.

The other swap window was to draw in NRI funds through the FCNR-B deposit route.

Under the facility, banks were permitted to borrow from international banks/multilateral agencies up to 100 per cent of their core capital and swap the amount with the Reserve Bank at a concessional rate of 3.5 per cent.

However, it is not known how many banks have availed of this facility so far, barring a few like YES Bank, which said it raised $255 million early October.

"It has been decided that if any bank is being sanctioned any loan from any international/multilateral financial institutions and is receiving a firm commitment in this regard on or before November 30, it will be allowed to enter into a forward-forward swap under the first leg of which the bank will sell forward the contracted amount of forex corresponding to the loan amount for delivery up to December 31," RBI said in a statement on Friday.

However, the regulator clarified that the window will remain open till December 31 only to those banks which are negotiating loans or are close to closing the deal.

"If the bank is not in a position to deliver the contracted forex amount on the contracted date, it will have to pay the difference between concessional swap rate contracted and the market swap rate plus 100 basis points," RBI said.

"It is reiterated that the above relaxation is available only for the contracts entered into up to November 30, and not thereafter and that all the other terms and conditions for the swap will remain unchanged as notified earlier," the RBI said.

Both the windows till Wednesday had netted in $22.5 billion and are to be tapered off on November 30.

Inflation indexed bonds worth Rs 1,000 cr to be sold on Nov 26

 
The Reserve Bank of India (RBI) will sell inflation-indexed bonds worth Rs 1,000 crore through price-based auction on November 26.

This is the second round of inflation bonds, after the maiden offering in June.

RBI would allot up to 20 per cent of the notified amount of the bonds to eligible individuals and institutions according to the scheme for non-competitive bidding facility.

Interest at the rate of 1.44 per cent per annum will accrue on the indexed principal value of the bonds from the date of original issue and will be paid half yearly on December 5 & June 5, the central bank said in a release.

The bids for the auction should be submitted in electronic format on RBI's core banking solution on November 26, the release said.

The central bank will announce result of the auctions on November 26 and payment by successful bidders will be on November 27, it added.

Indian rupee up 31 paise against US dollar

The Indian rupee strengthened by 31 paise to 62.56 against the US dollar in early trade at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

Forex dealers said strengthening euro against the dollar and fall in oil prices overseas following a key deal between world powers and Iran on its controversial nuclear programme and a higher opening in the domestic equity market also supported the local currency.

The rupee had gained six paise to end at 62.87 on Friday after the Reserve Bank of India was said to have stepped in to stem the fall.

Meanwhile, the BSE Sensex recovered by 223.26 points, or 1.10 per cent, to 20,440.65 in early trade on Monday.

FIIs invest net Rs 7,500 crore in Indian stocks in November

 
New Delhi: Overseas investors poured in over Rs 7,500 crore (USD 1.2 billion) in the equity market since the beginning of the month amid renewed optimism about the Indian economy.

Total foreign investment in the stock market has reached Rs 96,461 crore (USD 17.4 billion) so far in 2013, according to data from the Securities and Exchange Board of India, the capital market regulator.

Foreign institutional investors (FIIs) bought equities worth Rs 39,572 crore and sold Rs 32,045 crore of shares during November 1-22 -- a net inflow of Rs 7,527 crore.

On November 22, FIIs were net sellers of equity for the first time since October 3 and sold Rs 40 crore of shares on renewed uncertainty about the US Federal Reserve tapering its stimulus programme.

They invested a net Rs 28,700 crore in stocks during the past two months (September-October).

Overseas investors pulled out Rs 4,569 crore from debt securities so far this month. They have withdrawn a net Rs 54,723 crore from the debt market since the beginning of 2013.

FII inflows into the stock markets have been buoyant since September 2013 on the back of continued global liquidity.

Finance Minister P Chidambaram had said earlier this month that the current account deficit has been under control, the fiscal deficit target will be met, export growth is expected to continue and a bumper harvest is likely after the good monsoon.

Industrial production and trade data released earlier this month gave an impetus to foreign investors.

Industrial output rose 2 percent in September from a dismal 0.43 percent in August. India's exports rose 13.47 percent to USD 27.27 billion in October while imports dipped 14.5 percent, helping to narrow the trade deficit.

The benchmark 30-stock S&P BSE Sensex closed at a record 21,239.36 on November 3.
Since the end of October, the index has declined 947 points, or 4.47 percent, to 20,217.39 points on Friday.

As of November 22, the number of registered FIIs in the country stood at 1,743 and the total number of sub-accounts at 6,406.

Sensex gains over 223 points to snap three-day losing streak

Mumbai: Snapping its three-day losing streak, the BSE benchmark Sensex recovered over 223 points in early trade Monday on emergence of buying by funds amid a firming trend in other Asian markets.

The 30-share index, which had lost nearly 674 points in the previous three sessions, recovered 223.26 points, or 1.10 percent, to 20,440.65, with stocks of banking, realty, oil and gas and FMCG sectors leading the recovery.

The National Stock Exchange Nifty moved up by 68.75 points, or 1.15 percent, to 6,064.20.

Brokers said emergence of buying by funds and retail investors amid a firming trend in other Asian bourses, after US markets hit another record high on Friday, mainly buoyed the trading sentiment here.

Besides, expectations of a drop in import bill after crude oil prices fell in the overseas markets, following a key deal between world powers and Iran on its controversial nuclear programme, also triggered buying activity, they said.

Stocks of state-run oil marketing companies such as Indian Oil rose 1.99 percent to Rs 204.70. Hindustan Petroleum rose 4.25 percent to Rs 211 and Bharat Petroleum gained 2.68 percent to Rs 341.60.

Reliance Industries shares also gained 1.27 percent to Rs 854.65.

In other Asian markets, Japan's Nikkei index rose by 1.36 percent, while Hong Kong's Hang Seng gained 0.56 percent in early trade today.

The US Dow Jones Industrial Average surged to yet another high by gaining 0.34 percent on Friday.