The Reserve Bank of India (RBI) has stepped up efforts to control the excess liquidity that has emerged out of the whole process of demonetization, announced by Prime Minister Narendra Modi, effective from November 8, 2016.

On Saturday, the RBI unexpectedly ordered commercial banks to deposit their extra cash with it. The CRR remains unchanged at 4.00 percent of outstanding net demand and time liabilities (NDTL) but scheduled banks shall maintain an incremental CRR of 100 percent on the increase in NDTL between September 16 and November 11, Scotiabank reported.

Further, the increased CRR is expected to pause domestic bond-buying, raising government bond yields that have tumbled post the surprise abolition of INR500 and INR1,000 notes, although foreign investors reduced their positions by total USD2.42 billion in the meantime.

On the FX side, the RBI's firm intervention and the incremental CRR will bring a brief relief as the INR plunged to a record low of 68.865 last Thursday before recovering from its 39-month closing low a day later.

Meanwhile, according to reports from Reuters, Saudi Arabia has denied presence in the meeting scheduled today, between OPEC and non-OPEC member countries, saying that no oil agreement has yet been reaching within the domain of OPEC. This casts a cloudy outlook over the OPEC's next meeting scheduled for 30 November in Vienna.

CAD/INR cross spot running a tight correlation with crude oil prices is likely to remain in the downward channel and retreat modestly from recent highs. At 5:00GMT, the FxWirePro's Hourly CAD Strength Index remained neutral at -23.76 (higher than the -75 benchmark for bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex