HALISTER1: India Government Bond Yield Curve Flattens on Rate-Cut Bets

India Government Bond Yield Curve Flattens on Rate-Cut Bets

(Bloomberg) -- Bond market now factoring in a 25bps repo rate cut in February, with possibility of more cuts based on inflation trajectory, says Harish Agarwal, Mumbai-based fixed income trader at FirstRand.
  • Spread between 6.97% 2026 debt and 7.61% 2030 now at 28bps versus 38bps end-2016
  • NOTE: Govt lowers borrowing target for fiscal 2017 by 180b rupees
  • NOTE: Banks slashed key lending rates after Prime Minister Modi urged lenders to move beyond traditional priorities, given surge in deposits following high-value currency ban
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Source: BFW (Bloomberg First Word)

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Harish Agarwal (FirstRand Ltd)

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