Halister News

(Bloomberg) -- India’s bond markets may be slow to react to sluggish growth and the 10-year yield should remain within the 6.5-6.7% range, Sandeep Bagla, associate director at Trust Capital Services says.

• “Bond markets were not expecting a rate cut from RBI as they are fixated on their inflation mandate. They will react to slowing growth with a lag only”
• Bond markets are disappointed but only a little; range of 6.50% to 6.70% should hold for some time to come
• System has excess SLR, so RBI’s move today has very marginal impact on bonds
• NOTE: RBI kept rates steady but cut a key bond holding ratio by 50bps to 19.5%
• Yield on 10-year govt bond gains 4bps to 6.69%
• USD/INR down 0.4% to 65.23

To contact the reporter on this story: Subhadip Sircar in Mumbai at ssircar3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui