Gold Silver Reports (GSR) – Money Market Update – Inflation has been ticking lower, but the RBI expects it to inch up in coming months amid rising fuel and vegetable prices. Traders will also watch out for whether the central bank allows foreigners to up their investments in government bonds, a move which is likely to fuel a further rally in the market.
Indian bonds are likely to trade steady after posting gains for a second straight day on Wednesday. The focus is on the RBI’s monetary policy meeting today. The MPC is widely expected to keep rates unchanged, but traders will focus on the central bank’s outlook on inflation.
The benchmark 10-year bond yield fell four basis points to 7.29 percent on Tuesday, and it fell 29 basis points since March 27 when the government announced a smaller and than expected borrowing program.
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Meanwhile, the rupee is expected to open at 65 per dollar having closed higher at 65.14 on Wednesday.
