Traders, economists see early taper warning signs to markets from RBI

The central bank is increasingly shifting its forex intervention to the forwards market to keep from injecting rupee liquidity, according to analysts.

Traders are seeing hints that India’s central bank is seeking to drain record liquidity from the banking system, another sign that the global flood of pandemic-era easy money may begin to ease.
 

The Reserve Bank of India is increasingly shifting its forex intervention to the forwards market to keep from injecting rupee liquidity, according to traders and economists, including Madhavi Arora of Emkay Global Financial Services Ltd. The monetary authority is also signaling a taper to its outright bond purchases, or even do away with them totally, from next quarter, some of them said.

Amid the global move toward normalization,