Subhadip Sircar

India’s plan to boost inflows into the country has got off to a strong start, with the central bank Governor Sanjay Malhotra saying banks have garnered $32 billion under the various measures announced.

India’s short-dated bonds will outperform debt with long duration, as the central bank is expected to keep interest rates on hold and banks are set for a large cash surplus, according to traders.

The rally in the yen is set to bolster a number of other Asian currencies based on their relatively high correlations, according to Citigroup Inc. and Barclays Bank Plc.

The Reserve Bank of India is expected to keep interest rates unchanged on Wednesday as policymakers assess whether higher energy costs from the renewed Middle East conflict spill over into broader inflation before raising borrowing costs.

Central banks in emerging Asia are increasingly finding ways to support their currencies without dipping into foreign-exchange reserves, as recurring Middle East tensions and the prospect of higher-for-longer US interest rates keep policymakers on edge.

Central banks in emerging Asia are increasingly finding ways to support their currencies without dipping into foreign-exchange reserves.

India’s central bank, whose programs are drawing in billions of dollars of overseas cash, is increasingly present in foreign-exchange markets to tamp down rupee volatility, offering a more predictable trajectory for the Asian currency.

Shorter-tenor India bond yields surged after the central bank said it will close a special dollar deposit window for overseas residents a month earlier than scheduled.

Caught off-guard by India’s decision to close early a special window to draw foreign-currency deposits, traders are now paring bets on gains in the rupee and short-term bonds.

India’s central bank is intensifying efforts to support the rupee, emboldened by a jump in its foreign-exchange reserves to contest the pressure from higher oil prices.