RBI’s Pivot Drives Investors to Bet on Gain in Indian Bonds
Indian investors are positioning for a rally in government bonds as the central bank is expected to deliver further interest-rate cuts this year, driven by bets on an economic slowdown and a decline in inflation. The Reserve Bank of India's (RBI) pivot towards monetary easing may lead to a decrease in the benchmark 10-year yield to 6.4% by June, according to SBM Bank (India) Ltd. The yield was at 6.69% on Friday, with bond traders forecasting an extended rally in 2025.
- This shift in investor sentiment highlights the critical role of monetary policy in stabilizing India's economy amidst global headwinds and domestic growth challenges.
- Will the RBI's aggressive easing cycle compromise its ability to address inflation concerns and maintain financial stability in the long term?