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Money market and bond market during the week

*  Banking sector liquidity in India was at a deficit of Rs130 bn on March 27 compared to deficit of Rs2.3 tn on March 20. The weighted average call rate (WACR) was at 6.16% on March 27 (6.36% on March 20).

*  Government cash balances with the RBI (estimated) was at Rs3.2 tn on March 21; higher than Rs2.7 tn on March 14.

*  Indian 1-year T-bill was at 6.44% on March 28 (6.48% on March 21). The Indian 5-year G-sec yield was at 6.44% on March 28 (6.5% on March 21).

*  Indian 10-year G-sec yield was at 6.58% on March 28 (6.63% on March 21).

*  1-year OIS was at 6.04% on March 28 (6.09% on March 21). 2-year OIS was at 5.85% on March 28 (5.84% on March 21).

FX market during the week

*  Dollar index (DXY) was around 104.3 on March 28 against 104.1 on March 21. EUR-USD fell 0.2%  to 1.079 on March 28 from end of last week while GBP-USD gained around 0.3% to 1.295. USD-JPY fell around 0.9% to around 150.7

*  USD-INR was at 85.5 on March 28 (86 on March 21).

*  INR 1-year forward premium was at 2.21% on March 28 (2.19% on March 21).

Equity market during the week

*  Nifty-50 index gained 0.7% on March 28 from closing of last week while Nifty mid-cap. index fell 0.4% and small-cap. index fell 0.9%. Broader market index (Nifty-500) gained 0.3% from closing of last week.

Commodities market during the week

*  Brent crude oil prices was around US$74.5/bbl on March 28 compared to around US$72.5/bbl on March 21.

*  Gold prices increased around 1.7% over the week to around US$3072/oz on March 28. Copper prices (LME index) decreased around 0.1% as on March 28 over end of last week.

Key events/data releases during the week

*  Center’s fiscal deficit in 11MFY25 was at 86% of FY2025RE. Total receipts in 11MFY25 was 13.4% higher than in 11MFY24 (81% of FY2025RE), driven by strong growth in personal income taxes and non-tax revenues. Total expenditure in 11MFY25 was 3.9% higher than 11MFY24 (82.5% of FY2025RE). Capital expenditure growth at 0.8% (79.7% of FY2025RE and (-)35% yoy in February) remained weak. Revenue expenditure growth remained in line with budgeted targets (83.3% of FY2025RE in 11MFY25 and growth of 4.7%). Among the larger spending areas, revenue expenditure was relatively muted for transfers to states, education, and drinking water and sanitation, while a healthy pace was seen in agriculture, health, rural development, and subsidies.

*  The current account deficit in 3QFY25 was at US$11.5 bn (1.1% of GDP) (2QFY25 CAD was US$16.7 bn and 1.8% of GDP). Goods trade deficit narrowed to US$79.2 bn (2QFY25: US$84.3 bn). Net invisibles surplus remained in line with 2QFY25 at US$68 bn with software net exports at US$41 bn (2QFY25: US$40 bn). Capital account in 3QFY25 was at US$(-)26.8 bn (2QFY25: US$36.1 bn). 3QFY25 BOP was at US$(-)37.7 bn (2QFY25: US$18.6 bn).

*  The central government announced GSec gross borrowings of Rs8 tn in 1HFY26 (2HFY25 gross borrowing was at Rs6.6 tn) which is 54% of the total FY2026BE gross GSec borrowings. 34% of the borrowings will be in the 10-year and 15-year tenors while 35% will be in 30-50 year tenors. The net issuance for 1HFY26 is pegged at Rs5.9 tn. Further, 1QFY26 gross short-term borrowing through T-bill has been announced at Rs2.5 tn (net issuance: Rs(-)639 bn).

*  Infrastructure output (weight of 40.3% in IIP) growth in February 2025 was at 2.9% (January: 4.6%). Cement production growth was at 10.5% (January: 14.6%), followed by, fertilizers production growth at 10.2% (3.0%), steel production growth at 5.6% (4.7%), electricity production growth at 2.8% (1.3%), coal production growth was at 1.7% (4.6%), and refinery products’ production growth at 0.8% (8.3%). On the other hand, crude oil production growth was at (-)5.2% (January: (-)1.1%) and natural gas production at (-)6% ((-)1.5%).

*  Banco de México lowered their overnight interbank interest rate by 50 bps to 9% highlighting progress on inflation but warning of heightened uncertainty relating to trade tensions and a weakening economy.

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