Citibank is predicting Indian sovereign bonds will extend a rally that’s driven benchmark yields to seven-year lows and a recent inflation spike will cool toward the end of the year.
The Reserve Bank of India’s regular cash infusions into the banking system and the global hunt for yield should support demand for debt, according to Badrinivas Nallan Chakravarthy, Mumbai-based head of local markets treasury at the U.S. bank. Consumer prices in July breached the upper bound of the RBI’s target range, rising the most in 23 months.
