Last week, the Federal Deposit Insurance Corporation (FDIC) seized the assets of SVB marking the largest bank failure in the US since Washington Mutual during the height of the 2008 financial crisis.
Nageswaran says whenever Federal Reserve is on an aggressive tightening, this type of currency reaction happens historically. This time it is far more moderate, he adds
The RBI is widely expected to maintain the status quo on interest rates, while it may revise the inflation forecast as well as growth projections for FY23.
The BSE Sensex and the NSE Nifty are set to open in green, mirroring strong cues from Asia and Wall Street after the U.S. central bank raised interest rates.
Any hint of monetary tightening translates into rising bond yields but the counterintuitive move of both 10-year and 2-year yields has left market confused.