Mumbai: India’s benchmark 10 years bond yield On Thursday, a source said the government would not need to borrow additional funds from the market in the current financial year.
No plans for revision in the medium term inflation target of 4%, while the government will not need to borrow any additional funds in 2022/23, a source told reporters on Wednesday.
On Saturday, the government announced a slew of changes in the tax structure for critical items to protect consumers from rising prices, with inflation hitting an eight-year high of 7.79% in April.
Experts have warned that the loss of revenue from the measures announced to contain inflation will mean the government is likely to miss out on fiscal deficit target And have to borrow more from the market.
A senior fixed income trader at a private firm said, “The comments have helped the sentiments to some extent, but this is early in the year. Any additional borrowing will be announced only in the second half, so these comments are sacrosanct. cannot be assumed.” The bank said.
India’s benchmark 10-year bond yield was trading at 7.29%, down 1 basis point from the previous close.
The fall in yields was limited by firming global crude prices, which are threatening to keep inflation under pressure in a country that imports more than two-thirds of its oil needs.
Oil prices rose on Thursday, extending a cautious rally on signs of tight supply this week, while the European Union weighed in on plans to ban imports from Russia, the world’s second-largest crude exporter, after invading Ukraine. fought with Hungary.
The inflation outlook may also remain a concern for the central bank and analysts expect a further hike in interest rates after the 40 basis point out-of-turn hike announced earlier in the month.
“Given the central bank’s desire that inflation management remains key to its policy objectives, we are confident that the RBI will stay the course, and take a 50 bp hike in the repo rate to 4.90% in June,” Rahul said. ” Bajoria, a senior economist at Barclays.
“We expect the decision to be unanimous, and the bank is also expected to raise its inflation forecasts and reduce its growth projections for FY22-23,” he added.
RBI’s Monetary Policy Committee meeting is scheduled to be held from June 6-8 and the governor will announce his decision on June 8.
No plans for revision in the medium term inflation target of 4%, while the government will not need to borrow any additional funds in 2022/23, a source told reporters on Wednesday.
On Saturday, the government announced a slew of changes in the tax structure for critical items to protect consumers from rising prices, with inflation hitting an eight-year high of 7.79% in April.
Experts have warned that the loss of revenue from the measures announced to contain inflation will mean the government is likely to miss out on fiscal deficit target And have to borrow more from the market.
A senior fixed income trader at a private firm said, “The comments have helped the sentiments to some extent, but this is early in the year. Any additional borrowing will be announced only in the second half, so these comments are sacrosanct. cannot be assumed.” The bank said.
India’s benchmark 10-year bond yield was trading at 7.29%, down 1 basis point from the previous close.
The fall in yields was limited by firming global crude prices, which are threatening to keep inflation under pressure in a country that imports more than two-thirds of its oil needs.
Oil prices rose on Thursday, extending a cautious rally on signs of tight supply this week, while the European Union weighed in on plans to ban imports from Russia, the world’s second-largest crude exporter, after invading Ukraine. fought with Hungary.
The inflation outlook may also remain a concern for the central bank and analysts expect a further hike in interest rates after the 40 basis point out-of-turn hike announced earlier in the month.
“Given the central bank’s desire that inflation management remains key to its policy objectives, we are confident that the RBI will stay the course, and take a 50 bp hike in the repo rate to 4.90% in June,” Rahul said. ” Bajoria, a senior economist at Barclays.
“We expect the decision to be unanimous, and the bank is also expected to raise its inflation forecasts and reduce its growth projections for FY22-23,” he added.
RBI’s Monetary Policy Committee meeting is scheduled to be held from June 6-8 and the governor will announce his decision on June 8.