Bonds in India Slide as RBI Raises Benchmark Rate, Rupee Climbs
- Traders see bond losses capped as policy stance still neutral
- There may not be a series of hikes: ICICI Securities’ Singh
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Indian sovereign bonds slipped while the rupee climbed after the central bank raised its benchmark interest rate for the first time since 2014, but retained its neutral policy stance.
Only 14 of 44 economists surveyed by Bloomberg News had predicted the Reserve Bank of India’s decision to increase the repurchase rate by 25 basis points to 6.25 percent. Thirty expected no change. The central bank also said it will grant more entities the right to short-sell securities and allow more players to participate in the when-issued market, as part of measures to improve regulation and deepen financial markets.