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The Reserve Bank of India bought bonds worth 40,000 crore through open market operations to increase liquidity in the banking system. This brings their total bond purchases in February to 80,000 crore. Market participants anticipate further liquidity injections through similar operations or repo auctions. RBI had also made significant bond purchases in January.
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The Reserve Bank of India's dollar-rupee buy-sell swap saw strong demand but resulted in a lower-than-expected cut-off premium, leading to further rupee depreciation. The $10 billion swap, oversubscribed by $16.23 billion, will reverse in March 2028. Market participants expect continued weakness in the rupee as the RBI focuses on meeting the credit market's rupee liquidity needs.
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Wall Street's momentum trade driven by tech, communications, and consumer discretionary sectors is faltering due to concerns over shrinking growth and trade uncertainties. Safe havens like health care and consumer staples are now leading the market as investors pivot defensively amidst the rising economic volatility.
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