India’s 10-year bond yield held at this week’s highest level on speculation the central bank will increase interest rates at a policy review on July 26.
The Reserve Bank of India will raise the repurchase rate by 25 basis points to 7.75 percent, according to 15 of 17 economists surveyed by Bloomberg. Two forecast no change. The rate was last boosted by 25 basis points on June 16 to damp an inflation rate that’s exceeded 8 percent for 18 months.
“The high-inflationary environment is not going away anytime soon, with inflation proving stubbornly sticky,” Leif Eskesen, Singapore-based chief economist at HSBC Holdings Plc, wrote in a research report published today. “The RBI is still likely to consider inflation as the dominant concern and continue to tighten.’
The yield on the 7.8 percent government debt due April 2021 was little changed at 8.28 percent as of 9:38 a.m. in Mumbai, according to central bank data.
The central bank may raise the repurchase rate next week and by an additional 50 basis points in the remainder of the fiscal year ending March 31, according to Eskesen.
The wholesale price index rose 9.44 percent in June from a year earlier after climbing 9.06 percent the previous month, according to government data. The RBI has raised the repurchase rate, at which lenders borrow from the monetary authority overnight, 10 times since the start of 2010.
The Reserve Bank of India will raise the repurchase rate by 25 basis points to 7.75 percent, according to 15 of 17 economists surveyed by Bloomberg. Two forecast no change. The rate was last boosted by 25 basis points on June 16 to damp an inflation rate that’s exceeded 8 percent for 18 months.
“The high-inflationary environment is not going away anytime soon, with inflation proving stubbornly sticky,” Leif Eskesen, Singapore-based chief economist at HSBC Holdings Plc, wrote in a research report published today. “The RBI is still likely to consider inflation as the dominant concern and continue to tighten.’
The central bank may raise the repurchase rate next week and by an additional 50 basis points in the remainder of the fiscal year ending March 31, according to Eskesen.
The wholesale price index rose 9.44 percent in June from a year earlier after climbing 9.06 percent the previous month, according to government data. The RBI has raised the repurchase rate, at which lenders borrow from the monetary authority overnight, 10 times since the start of 2010.
