Japan rules out an additional oil release, Qatar establishes a clearing link with Euroclear, and expectations of an interest rate hike in India.

Japan announced on Monday that it does not intend to release new quantities of its oil reserves, despite the G7 agreement to withdraw 100 million barrels of crude oil and diesel from emergency stocks, at a time when concerns are mounting about rising global fuel prices.

Japanese Chief Cabinet Secretary, Minoru Kihara, said that his country does not intend, at the present time, to release additional quantities of crude oil from its national reserves, noting that Japan had previously withdrawn supplies from stocks.

Kihara added, in a press conference: “Japan has been releasing oil from its reserves for some time, and at this stage there are no plans for an additional release.”

The Japanese official's statements come after the G7 agreed, on Friday, to release 100 million barrels of diesel and crude oil from emergency reserves, while pledging to avoid imposing restrictions on energy exports.

The agreement came at a time when Europe is under US pressure to withdraw emergency diesel stocks, amid rising fuel prices and fears of the repercussions of energy supply disruptions linked to the US-Israeli war on Iran.

It is still unclear how much quantities will be included in the new withdrawal, out of 400 million barrels that 32 member states of the International Energy Agency agreed to release in March to alleviate supply disruptions.

The Executive Director of the International Energy Agency, Fatih Birol, said last week that member states had released about two-thirds of the agreed upon amount of 400 million barrels.

Japan announced, in March, that it would release about 80 million barrels of oil from its reserves, within the framework of the coordinated agreement, and it also implemented a second round of releasing national crude oil stocks last May.

Kihara said that the Group of Seven meeting was held in light of the delay in the release of European strategic reserves and the increasing concerns about the rise in global diesel prices, explaining that the discussions focused especially on measures to confront diesel prices in Europe, the United States and other regions.

The Qatar Central Bank and Euroclear Group announced on Monday that Qatar will establish a clearing and settlement link with the group for its local government bonds, in a move aimed at expanding the international investor base and enhancing liquidity in the local debt market.

The two parties said in a joint statement that the initiative is expected to improve market efficiency and enhance international capital flows to Qatar, at a time when global investors are increasingly interested in debt instruments issued by emerging markets and denominated in local currencies.

Under the new link, international investors will be able to purchase, hold and settle government bonds and Qatari sukuk denominated in Qatari riyals, which meet the conditions, through Euroclear’s international settlement system.

Euroclear, headquartered in Belgium, is a financial market infrastructure group that provides securities settlement and custody services, allowing banks and investors to hold, transfer and settle financial assets.

Under the new structure, Euroclear will provide international settlement services, while Edaa, the central custodian for securities in Qatar, will continue to provide its services to local investors. The Qatar Central Bank will remain responsible for issuing securities and making payments to investors.

Sheikh Ahmed bin Khalid bin Ahmed Al Thani, Deputy Governor of the Qatar Central Bank, said that cooperation with Euroclear represents “a practical step towards expanding international access to Qatari government debt instruments,” and enhancing the presence of the Qatari market and its visibility among global investors.

Investors are increasingly betting that the Indian central bank will raise interest rates this week, with inflation rising and strong growth continuing, at a time when major central banks are moving to tighten monetary policy.

A Reuters poll showed that 35 out of 61 economists, or about 60 percent, expect to raise the interest rate by 25 basis points during the Monetary Policy Committee meeting on Wednesday. Swaps markets show a stronger bet, fully pricing in an increase in borrowing costs.

The raise, if achieved, will be the first for the Indian central bank in about four years, raising the repurchase rate from 5.25 percent, the level at which it has stabilized for about 10 months. The bank had reduced interest rates by a cumulative amount of 125 basis points during 2025, from 6.5 to 5.25 percent.

Rahul Bajoria, an economist for India and the Association of Southeast Asian Nations at Bank of America Global Research, said that the central bank “now has few reasons to wait,” as growth prospects become clearer, inflation pressures expand, and the need to wait for more clarity at the global level declines.

Bajoria expects the central bank to begin a monetary tightening cycle that may reach 100 basis points, starting in October.

The calm inflation reading at the beginning of the year gave the central bank room to monitor, even with the rise in oil prices after the war with Iran, but price pressures later expanded beyond food and fuel.

Consumer price inflation in India rose to 4.82 percent in August, exceeding the central bank's target of 4 percent for the third month in a row, while the prices of about half of the components of the CPI basket rose at rates at or above the target.

In contrast, the Indian economy grew by 7.8 percent during the second quarter of the year, which enhances the central bank’s ability to move towards tightening monetary policy without facing an immediate risk to growth.

Markets are watching the central bank's decision

Analysts believe that keeping interest rates unchanged may face pressure in the markets, especially the currency and bond markets.

Vivek Rajpal, macroeconomic strategist for Asia at GB Drax Honoré, said that maintaining rates “will not be viewed positively in the currency market,” and may also put pressure on long-term bonds, adding that the central bank will need to indicate its willingness to raise rates again if necessary.

The Indian rupee remains under pressure, about 1 percent below its record low in May.

High interest rates may make Indian bonds more attractive to foreign investors, at a time when local stocks are facing difficulties in the absence of clear opportunities related to artificial intelligence.

Institutions have varying estimates of the size of the potential tightening cycle; Economists at Nomura and Barclays expect a limited cycle of between 25 and 50 basis points, while Bank of America and ANZ expect increases ranging between 75 and 100 basis points.

Swaps markets are currently pricing in about 100 basis points of increases over the next 12 months, and about 140 basis points over 24 months.

Bajoria believes that the central bank may not want to commit to a long tightening cycle during the October meeting, but it may be more prepared for that in December.

Hence, attention will be focused on any adjustments in the central bank’s expectations for inflation and growth, in addition to its position on “neutral” monetary policy, in search of indications of the extent to which it may go in the interest-raising cycle.