Bonds Slide in India After Central Bank Holds Rates; Rupee Jumps
- ANZ sees some moderate pressure on bonds in the short term
- Bond market disappointed as rate-cut hopes belied: Nomura
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India’s sovereign bonds fell, reversing earlier gains, after the Reserve Bank of India kept interest rates unchanged as expected and lowered the proportion of deposits that lenders must invest in specified securities such as government notes. The rupee rallied the most since March.
The benchmark repurchase rate was left at 6 percent, with five on the six-member monetary policy committee voting for no change. The outcome was predicted by 31 of 32 economists in a Bloomberg survey, while one saw a cut to 5.75 percent. The central bank reduced the statutory-liquidity ratio by 50 basis points to 19.5 percent, effective Oct. 14. It also raised its inflation forecast and lowered the growth estimate for Asia’s third-largest economy.