Indian bonds edge up after Fed pause amid RBI concerns
Business
Indian government bonds got a bit of a boost on Thursday after US Treasury yields dropped, thanks to the Fed hinting there will not be more rate hikes for now.
The 6.94% 2036 benchmark bond yield slipped to 7.3714%.
Still, gains were limited since traders are bracing for tighter cash rules from the Reserve Bank of India and an upcoming debt auction.
India's inflation at 5.54% worries traders
Even with this small win, traders are not relaxing: rising inflation and a growing gap between Indian and US bond yields, now at its widest since July 1, are making them cautious.
With September inflation at 5.54% and possibly heading above the RBI's comfort zone in October, everyone is watching how the RBI manages cash flow and keeps prices in check.