Indian Bond Yields Fall on Expectation of Lower Lending Rate

Indian Bond Yields Fall on Expectation of Lower Lending Rate

28 March 2016, 12:35
Roberto Jacobs
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Indian Bond Yields Fall on Expectation of Lower Lending Rate

The 10-year Indian bond yields declined -0.05% on Monday as the government’s move to cut the small savings rate by 0.6% to 1.3%. Moreover, the Reserve Bank of India is also expected to cut interest rates by at least 0.25% in its first bi-monthly monetary policy for fiscal year 2016-17,

Bank of America Merrill Lynch said in a report that they also expect a cut in lending rates when the RBI unveils its monetary policy. The fall in 10-year bond yields is a precondition for lower lending rates, it said in a report

Moreover, we expect that RBI will cut rates in two tranches the first one of 0.25% in April and another tranche of 0.25% in August.

In addition, India 7.28% 2019 bond volumes surge due to some entities booking profit for accounting gains ahead of fiscal year-end and buying back again for their portfolios.

The material has been provided by InstaForex Company - www.instaforex.com

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