DBS expects RBI to gradually lower rates
Reuters Market Eye - DBS says India's 10-year bond yield will be the only one falling over the next six months among the 10 Asian markets it tracks.
DBS expects RBI to gradually lower rates at a pace of 25 bps per quarter, forecasting that demand pressures behind inflation are easing considerably.
"The combination of high yields, a downward sloping forward path for policy rates and the prospect of more currency stability should see foreign interest in the gilt market remaining strong," DBS writes.
That's a contrast to Asia, where the prospects of stronger global economic growth and rising U.S. Treasury yields are putting bearish steepening pressure on the short-ends of Asian yield curves, it adds.
(Reporting by Subhadip Sircar)
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India's economic growth probably slowed to around 5 percent in the three months to September, slipping from 5.7 percent in the previous quarter, two senior finance ministry sources said, putting pressure on the central bank to cut interest rates. Full Article