RBI Rate Cut Hopes Fuel Bond Inflows

Foreign appetite for Indian government bonds is back, with inflows picking up steadily over the last month, as investors gauge fresh expectations of a rate cut by the Reserve Bank of India (RBI) as early as August.

- Reuters

The RBI cut rates by a larger-than-expected 50 basis points in June and changed the stance to "neutral", prompting investors to bet on a prolonged pause.

But a sharp drop in June retail inflation has some investors reassessing the likelihood of another rate cut.