Rupee turns bullish following foreign fund inflows By Dilip Parmar The Indian rupee marked the second weekly gain and best performer following the Chinese yuan amid foreign fund inflows, improvement in risk appetite after foreign investors invested in Adani group’s stock and appointment of the committee by the supreme court to inquire about the group. Spot rupee gained almost a percentage to settle just above 82. Last week, the S&P 500 gained 1.9%, the first weekly gain in a month. A gauge of the dollar’s strength posted its first weekly loss since January as optimism about China’s growth and an eventual peak in US policy rates sent US shares sharply higher. Fed Chair Powell’s semi-annual testimony this Tuesday means the appetite for selling the dollar will remain relatively contained after eroding February gains. The investors can earn about 5% in US Treasuries, the highest since 2007, at the start of March, which may be a strong headwind for most risk assets. The yields on 10-year US Treasuries ended at 3.95%, pulling back from 4.09%, hit on Thursday for the first time since November. Traders in US interest-rate options are piling into cheap hedges that would pay off big if the Federal Reserve returns to 50 basis-point rate hikes at its upcoming policy meeting later this month. Over the past month, traders have gone from betting the Fed’s benchmark rate would peak around 5% in July to betting it will peak at about 5.5% in September. US Jobs data, Powell’s testimony and Central Bank decisions in Japan, Australia and Canada are key this week. The quality of recent data makes it challenging to get a clean read on where the US economy is and where it’s headed. Key labour indicators in the week ahead, nonfarm payrolls (Fri.), ADP (Wed.), and JOLTS (Wed.), will shed light on whether January’s across-the-board strength was a fluke or the start of a trend. A hawkish testimony by Powell along with a strong job market report (if there’s an upside surprise) could increase demand for safe-haven assets, lifting up the dollar and US treasury yields (By Dilip Parmar, Research Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)
The launched works involve rehabilitating the Galgamuwa Railway Station and upgrading the railway line from Maho to Anuradhapura, including additional tasks. Another project is the second phase of track rehabilitation from Maho to Omanthai (128 kms), funded by a $318 million Indian Line of Credit.
Transport Minister Gunawardena praised the efforts of Indian company IRCON in Sri Lanka and called for more cooperation in the railway sector. State Minister Shantha Bandara and officials from the Sri Lankan Ministry of Transport attended the event.
Railways is a priority for Indian assistance in Sri Lanka, with over $1 billion invested under five Indian Lines of Credit. IRCON has been involved in Sri Lanks since 2009. It has contributed to the modernisation of Sri Lanka Railways by reconstructing the entire railway line network in the Northern Province (253 Km) and upgradation of the Southern line (115 km), as well as improving safety through advanced signalling and telecommunication systems.
Despite Sri Lanka’s debt standstill in April 2022, India’s support under various Lines of Credit has continued.
(With PTI inputs)