India: bonds rise on signal of rate continuation

Prices rose and yields dropped on India’s benchmark ten-year bonds, after central bank governor Duvvuri Subbarao signaled interest rates aren’t about to rise. Monetary policy action would only be needed if food inflation “persists for a long time,” he said. Inflation has been rising of late, with the November figure the highest for a year, although Subbarao said yesterday that food inflation was a supply-side phenomenon and that monetary policy was an “ineffective instrument” to rein in accelerating costs.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from and redistribute by email or post to the web.