According to sources indian debt markets have priced in a 25 basis points rate cut by the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india (RBI) at its april policy meeting or even sooner, but some economists remain circumspect and warn the rally in bond yields could prove premature.
The benchmark 10 year bond yield dropped as much as 13 basis points on wednesday to 6.21% before closing at 6.23%, in the wake of the U.S. Federal Reserve's surprise cut, which raised expectations the bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi would follow suit.The bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi eased rates by 135 basis points in 2019 before abruptly deciding to hold rates in December.
But, with interest rate transmission the pace at which changes feed through to the wider economy still stuttering and the bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi having deployed several unconventional measures to boost credit growth, economists believe another cut is far from a given, and warn it will do little to tackle growth concerns.
