The overnight indexed swaps (OIS) ended up today as some traders preferred to be on the paying side amid strong expectations of a rate hike by the Reserve Bank of India at its third quarter policy review next week, dealers said.
The one-year OIS closed at 7.44-7.46 per cent compared with Tuesday’s 7.39-7.40 per cent, while the five-year swap rose to 8.03-8.06 per cent from the previous close. The rate hike is drawing closer, and concerns over inflation are still heavy,” said a dealer with a large private bank. “Given these factors, the receiving interest is fading from the market.”
On Thursday, ministry of commerce and industry will release the primary articles inflation data for week to January 8. Finance Minister Pranab Mukherjee today said that food inflation continues to be high and volatile, and added that it was a challenge for the government and the central bank to support growth as well as maintain price stability.
“The market was largely in a bearish mood today, also because of comments from the officials,” a dealer with another private bank said.
