Economics
RBI's Dovish Stance Lifts Indian Bonds, Fails to Cheer Equities
- Stocks cap worst fall of 2019 on lack of aid for shadow banks
- Policy short of measures to address cash crunch, analysts say
The Reserve Bank of India in Mumbai.
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Sovereign bonds rallied, sending yields to their lowest in 18 months, after India’s central bank cut its key rate and left the door open for more easing to boost growth. The decision failed to please the equity market, which was expecting decisive measures to address the lingering cash crunch.
Growth impulses have weakened significantly, the Reserve Bank of India said as it reduced the repurchase rate by 25 basis points, as predicted by 31 of 43 economists surveyed by Bloomberg News. The six-member Monetary Policy Committee also switched its stance to “accomodative” from neutral.