That risk may stay the hand of the Reserve Bank of India from adding to two rate cuts this year even though economic growth is weakening, according to ICICI Bank Ltd.[MUMBAI] India's bond rally is petering out as expectations for more rate cuts by the central bank are fading and the all-important monsoon season comes into focus.
That risk may stay the hand of the Reserve Bank of India from adding to two rate cuts this year even though economic growth is weakening, according to ICICI Bank Ltd. Yields of the nation's most-traded 2028 bonds have advanced by 12 basis points since the central bank on April 4 disappointed traders by retaining a neutral policy stance.
"How rains will pan out will have a huge bearing on inflation," said Naveen Singh, head of fixed-income trading at ICICI Securities Primary Dealership Ltd in Mumbai."Any bounce-back in food inflation will be sharp".
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