Fixed Income And Currency Market

11 Oct 2020

RBI Takes Over the Bond Market, Price Discovery is Hampered

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Bond markets are now held captive by the RBI, as they cannot express their views on macro economic policies and expectations on inflation. In the short term, bond yields will stay lower, as RBI has taken out the market’s ability to short but in the longer term, the repercussions will be catastrophic if the economy does not recover in a sustained manner.

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Arjun Parthasarathy
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