Are India's financial conditions tightening?
Jan 29, 09:01

The Reserve Bank of India has left the repo rate unchanged at its record low of 4.00 percent since May 2020. And while the policy stance remains accommodative, markets are of a different opinion, with the yield on the benchmark 10-year government bond at two-year highs. Rates have shot up in recent weeks, with the central bank setting a cut-off of 4.5053 percent at the latest 364-day Treasury bill auction, held on January 25. This is 36 basis points higher than what was set in early December 2021. The policy rate may be the same, but financial conditions are not.

Rising 364-day T-bill rates