The net foreign portfolio investment (hot money) was $209 million (inflow: $221mn; outflow $12mn). This was 5.5 percent of the amount the government raised. The remaining 94.5 percent was picked by commercial banks, insurance companies and other local investors. In the previous auction, foreign portfolio investment was $536 million (highest single day inflow to-date), it was 32.3 percent of that day auction issuance of Rs257 billion. Since it was the first auction after the relaxation of taxation to portfolio investors, the inflows were unexpectedly high.

The National CPI at 14.6 percent for January 2020 will surely further delay the expectations of rate decline. Earlier, the market was anticipating that rate cut might take place in March, now earliest rate cut chance is expected in May or Sep. This means no change in rate cut in next three months. The rates are marginally better in 3M – participants are looking to grab as much as they possibly can.