Mumbai, June 2 (IANS). The Indian bond market is registering a strong performance with the continuation of inflation and increasing the expectation of interest rates from the Reserve Bank of India (RBI). This information was given in a latest report of Jefferies.
Inflation in India is steadily decreasing. The average inflation was 4.6 percent in the last financial year and in April 2025 it declined to only 3.2 percent, the lowest level since July 2019. This has given more opportunities for RBI to cut interest rates to promote economic growth.
So far, the central bank has cut the policy rates by 50 basis points and Jeffers has estimated an additional 75 basis points by the end of 2025. This has made the Indian government bonds more attractive, especially for long -term investors.
The report states that compared to the bonds of developed markets like America, Indian bonds are currently giving better returns. Since April 2020, India’s Ten-Eyer Government Bonds have performed 51 percent better than the US Ten-Ear Treasury Bond in terms of US dollars.
Jefferies said that it is no longer a reality that India’s Ten-Eyer can get less than the Ten-Eye Treasury Bond of America. The confidence of investors is also increasing due to the strengthening of Indian rupee and better performance of the bonds of emerging markets.
India’s 15-year bond is the largest holding in a global sovereign bond portfolio, a global sovereign bond portfolio, which is 25 percent of the portfolio. Bonds are currently getting an interest of 6.38 percent, which shows continuous confidence in India’s fixed income market, as investors are moving away from G-7 government debt.
Jefferies said Indian bonds are performing better than G-7 government bonds, indicating a comprehensive change in traditional powerhouses such as US and Europe separate from Global Financial System.
The report said that India’s bond market is expected to benefit from both the domestic interest rate cuts and increasing global interest in loans of emerging markets due to the decline in inflation and the actual interest rates being attractive.
The report states that India is a promising option for international investors wishing to move away from the instability of the G-7 bond, which provides the possibility of high yield, stable economy and currency gains.
-IANS
SKT/ABM
