Radhika Rao, an economist at DBS Bank, spoke to CNBC-TV18 about her expectations from the RBI policy, inflation and the bond markets.
“The government’s benchmark 10-year yields have likely found a floor at 7.50 percent after the easing of border tensions. However, one will have to keep an eye on currency circulation because there has been leakage and has been going up,” Rao said.
DBS Bank expects the range for the 10-year old paper to be between 7.5 and 7.6 percent and that for the new paper to be between 7.3 and 7.4 percent.
“The central bank has been an important player in bond markets in FY19 so far,” she said, adding that more measures are expected on bonds and liquidity front in the second half as well.
With regards to the GDP growth, Rao said, “The December quarter numbers were largely in line with estimates but the growth engines are running at different speed. For the next two quarters, the GDP growth would be around 6-6.5 percent”.