India’s corporate borrowers, hit by a slowing economy and a recent up-tick in borrowing costs, can likely expect a helping hand from the central bank. A jump this week in Indian corporate bond yields due to surprisingly high inflation data is unlikely to persist as weak economic growth puts pressure on the Reserve Bank of India to ease, according to market participants. The RBI will probably cut rates as early as June, as a food-supply shock that pushed up prices reverses, according to Bloomberg Economist Abhishek Gupta. Volatile crude oil prices amid U.S.-Iran tensions have added to inflation pressure in India, the world’s third-biggest oil importer. Rising consumer prices will likely limit RBI easing options, but many believe the broader economic problems leave the central bank with little choice but to continue loosening policy.

Source: Mint January 16, 2020 00:33 UTC