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Front End Rates Lower, Focus On RBI Investment Restrictions

INDIA
  • India bonds brushed off the announcement by the RBI overnight regarding restrictions on foreign investors.
  • Bonds continued their rally with yields lower across the curve, albeit marginally.
  • The focus for now remains the commitment to fiscal prudence.
  • It remains to be seen how global investors will react to the restrictions on them investing in India, particularly when it is only one month since benchmark inclusion. This will take some time to play out yet could question India’s suitability for index inclusion.

2yr 6.787% (-2bp) 5yr 1.882% (-0.5bp) 10yr 6.915% (-0.5bp) 30yr 7.025% (-1bp)

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