Summary:

Foreign investors have increased their purchases of Indian government bonds, net buying more than US$ 1.06 billion (Rs. 9,000 crore) in the past four sessions, following weaker-than-expected economic growth figures. This has raised expectations of monetary policy easing by the Reserve Bank of India (RBI). Previously, international investors were net sellers in November, driven by US rates and concerns about the Fed's policies.

Market participants expect the RBI to ease monetary policy, with many predicting a reduction in the cash reserve ratio (CRR) from 4.5%. A 50-basis-point CRR cut could inject $12.98 billion into the financial system, boosting bond demand. The 10-year bond yield has dropped to a three-year low, suggesting that monetary easing may be imminent. Despite expectations of rate cuts, India's strong returns continue to attract foreign investors.

Source: IBEF

Disclaimer: The information on this website comes from the India Brand Equity Foundation (IBEF), a reliable source for thorough insights into numerous areas of the Indian economy. While we aim to offer accurate and up-to-date information, the views, opinions, and analyses stated herein are solely those of the authors and contributors and do not necessarily represent IBEF's official stance or position. Readers should check information from credible sources and use their own discretion when relying on content provided on this site. We assume no responsibility or liability for the supplied content, including its accuracy, completeness, and usefulness.