Traders in Reliance Industries' treasury department are evaluating options for parking the conglomerate's cash holdings in anticipation of potential interest rate hikes by the Reserve Bank of India (RBI) in the coming months, Bloomberg reported.
One of the proposals under consideration involves moving Reliance's cash from liquid mutual funds into short-dated money market instruments. The yield spread between money market papers and the benchmark rate has widened beyond its five-year average and is expected to narrow in the coming months, which could result in capital gains, the report added.
Markets are currently pricing in about 50 basis points of rate hikes this year, they added. Traders have also mulled reducing allocation to longer-dated bonds, which tend to be more sensitive to interest rate changes.
1 June 2026
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Reliance, however, denied taking a directional view. "We categorically deny the information you have provided in your email regarding our opinion on interest rates and the behaviour of the rupee," a RIL spokesperson told Bloomberg.
The discussions were based on broader market expectations rather than any directional call by the company on where rates are headed. It is common practice for corporate treasury teams to stress-test their portfolios against multiple interest rate scenarios.
RBI Decision and Macro Backdrop
The discussion comes ahead of the RBI's rate decision, which is expected to be announced after the Monetary Policy Committee (MPC) meeting concludes on Friday, June 5.
While 29 out of 35 economists surveyed by Bloomberg expect the central bank to keep the benchmark rate unchanged at 5.25%, they expect the RBI to adopt a hawkish stance to prepare markets for potential rate hikes later this year, amid inflation pressures triggered by an oil price shock.
India's sovereign bond yields have remained broadly stable this quarter even as the rupee slid to record lows. The currency has recovered in recent days, aided by RBI intervention and optimism around a potential US-Iran agreement that could lead to the reopening of the Strait of Hormuz, a key route for India's energy imports.
The rupee is down 6% this year and recently approached a record low of 97 against the dollar, hovering around 95-96 levels in recent days.
Reliance's traders expect the rupee to strengthen if a West Asia peace deal is reached and if the RBI takes measures to attract capital inflows, Bloomberg reported.
They have also proposed that the company — which owns the world's largest oil refining complex — partly hedge its long-term forward contract positions and coupon payments due in the fiscal year starting March 2028.
