Indian Rupee: RBI Move Tightens Liquidity – BNY

The Reserve Bank of India has advanced the closure of its special dollar deposit window to end-August, a move that reduces expected liquidity inflows into the Indian rupee, leading to a selloff in Indian bonds and higher 5-year and 10-year yields. Analysts note this could slow foreign exchange reserve accumulation and rupee appreciation, as authorities are more cautious about forward premium costs.