Moneycontrol
Feb 01, 2013 05:33 PM IST | Source: Reuters

DBS expects RBI to gradually lower rates

DBS says India's 10-year bond yield will be the only one falling over the next six months among the 10 Asian markets it tracks


DBS says India's 10-year bond yield will be the only one falling over the next six months among the 10 Asian markets it tracks.


DBS expects RBI to gradually lower rates at a pace of 25 bps per quarter, forecasting that demand pressures behind inflation are easing considerably.


"The combination of high yields, a downward sloping forward path for policy rates and the prospect of more currency stability should see foreign interest in the gilt market remaining strong," DBS writes.


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That's a contrast to Asia, where the prospects of stronger global economic growth and rising US Treasury yields are putting bearish steepening pressure on the short-ends of Asian yield curves, it adds.

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