April 9, 2013 / 9:53 AM / 4 years ago

MARKET EYE-India 1-year swap rates near 20-month low

* India one-year interest rate swaps were within
striking distance of a 20-month low as traders increased bets
that slowing economic growth will prompt the central bank to cut
interest rates on May 3.
* Expectations of weak industrial production data due on Friday
and falling wholesale price inflation due on Monday have
triggered receivings in swaps.
* One-year swaps were at 7.3950 percent, down from the previous
close of 7.42 percent.
* Current levels are not far from the low of 7.39 percent hit on
April 4. A breach below that would send the 1-year OIS to its
lowest since 7.33 percent on Aug. 11, 2011.
* The benchmark five-year swap rate was at 7.1650
percent, a level last seen on March 19, versus previous close of
7.20 percent.
* Dealers say the cash deficit in the banking system continued
to be 800-900 billion rupees but the stress is seen easing as
the government is expected to spend some of its cash balances.
* Banks borrowed 1.04 trillion rupees from the central bank's
repo window. 

 (archana.narayanan@thomsonreuters.com/
archana.narayanan.thomsonreuters.com@reuters.net)

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