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Inclusion of G-Secs in global bond indices is key to expanding the demand for Indian bonds
That FTSE Russell is considering including Indian government securities in the FTSE Emerging Government Bond Index provides a silver-lining to an otherwise bleak government bond market. The market is nervous about the deluge of government paper expected over the next 12 months. While the decision to place India on the watchlist for inclusion in the bond index does not mean that there will be an immediate flow of foreign funds into G-Secs, the eventual inclusion will certainly help create a sustainable pool of investors for Indian government securities. The RBI’s announcement that ₹7,24,000 crore will be borrowed in the next six months means G-Secs worth around ₹1,20,000 crore are going to be auctioned every month. With the FY21 fiscal deficit slated to be lower than the Revised Estimate, it was hoped that the Centre will need to borrow less in the new fiscal year. But
One Year Later, What Changes Should We Expect in the RBIâs Pandemic Playbook?Â
Almost one year down the line, circumstances have changed to a great extent, thus making the response from the central bank less obvious and straightforward compared with March 2020.
A worker walks past the logo of Reserve Bank of India (RBI) inside its office in New Delhi, July 8, 2019. Photo: Reuters/Anushree Fadnavis/Files
Macro11/Mar/2021
The COVID-19 pandemic has kept all Indian policymakers on their toes over the last year, including the Reserve Bank of India (RBI).
So far, the response from Indiaâs central bank has been exactly what the doctor had ordered to alleviate the implications of the pandemic. The RBI responded with a mix of conventional and unconventional measures, which has included reduction in policy rates by at least 115 bps, sustained forward guidance in the form of an accommodative monetary policy stance, ample liquidity support via open market operations, specia
Government Security (G-Sec) yields rose on Friday as the Reserve Bank of India devolved a significant portion of the auction of three G-Secs on Primary Dealers, indicating its discomfort with the yie
India’s stock bulls have more reasons to worry after having suffered back-to-back weekly losses as yields on the government bonds climb with global peers. The ratio between the nation’s benchmark 10-year yield and the BSE Sensex index’s current earnings yield is now at the highest level since 2001, dimming the appeal of equities. However, ICICI Securities isn’t swayed, saying in a note Monday that Indian equities don’t look overvalued relative to bonds even after the yield spike, adding that a situation of higher economic growth and moderate inflation would be bullish for stocks. Dear Reader,
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