MUMBAI; Indian rate swaps were mostly steady on Monday as dealers awaited the results of an upcoming bond auction to determine the interest-rate trend in the near term.
At 2:10 p.m., the five-year overnight indexed swap was at 7.62/7.64, steady from the previous close.
“It has been a fairly ranged session so far. But inflation is still a worrying factor,” said a dealer at a local brokerage.
The Indian government said after market hours on Friday it would sell two bonds totalling Rs90 billion on Feb. 9.
Indian Prime Minister, Manmohan Singh said on Saturday, reducing inflation was a priority for his government and measures were being taken to ease price pressures.
Wholesale price-based inflation index rose 6.11 % in the 12 months to Jan. 20, just below a two-year high, due to rise in prices of manufactured products and foods.
India’s central bank raised its key short-term lending rate last week by 25 basis points to 7.50 percent, its highest level in nearly four years, and analysts said another increase was likely in the next three months to curb inflation pressures.