Dharamraj Dhutia

India's Jio Finance, a wholly-owned unit of Jio Financial Services , has tapped the debt market with its maiden commercial paper (CP) issuance, ahead of its debut bond sale later this month, three merchant bankers said on Thursday.

Indian central bank's latest bond purchase and FX swaps underscore its intention to keep banking system liquidity in a surplus, which should help banks to pass on policy rate cuts to consumers, analysts said.

India's central bank said on Wednesday it will infuse $21 billion in rupee liquidity into the banking system in a bid to ease lending conditions and boost economic growth.

India's IIFL Finance has accepted bids worth $100 million for the reissue of its 8.75% 2028 dollar-denominated bonds, two sources aware of the matter said on Tuesday.

The 1-year dollar/rupee forward premium plunged on Monday and shorter-term India government bond yields fell, after the country's central bank announced an FX swap to shore up rupee liquidity.

Persistent foreign portfolio outflows may keep the Indian rupee on the defensive this week with the currency taking cues from regional peers, while government bonds will react to liquidity infusions by the central bank.

India's central bank will need to inject at least another 1 trillion rupees ($11.54 billion) into the banking system by March-end as durable liquidity remains in a deficit despite a recent cash infusion, market participants said on Friday.

The Reserve Bank of India will conduct a massive $10 billion three-year dollar/rupee swap auction next week to infuse durable rupee liquidity into the banking system, which has been reeling under large cash deficits, the central bank said on Friday.

Fundraising through infrastructure bonds is set to become more expensive for Indian lenders that have used them to raise record funds as investors demand higher returns amid increased debt supply.

The Indian rupee's direction this week will be shaped by the dollar's reaction to its recent correction and whether worries over U.S. tariffs continue to subside, while the bond market will be on watch for any further liquidity infusion measures by the central bank.