Indian Bonds Rally as RBI Signals Policy Easing Early Next Year
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Indian bonds rallied, pushing the 10-year yield to a 16-month low, as the central bank signaled it may ease policy in early 2015 after keeping borrowing costs unchanged at a meeting today.
“If the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle,” Reserve Bank of India Governor Raghuram Rajan said in today’s statement. He left the benchmark repurchase rate unchanged at 8 percent for a fifth straight meeting, a move predicted by 44 of 48 economists in a Bloomberg survey.