The yield on benchmark 10-year bonds has surged 45 basis points this year, rising above 8% in June for the first time in three years. “If they raise rates by 25 basis points and keep the stance neutral, markets will be okay. A rate hike may provide some respite to the rupee, the worst-performing major currency in Asia this year, which is hovering near an all-time low. While headline inflation could ease in July, Prime Minister Narendra Modi’s offer of higher crop support prices for farmers may spur the RBI to tweak its second-half inflation forecasts. “We recently added two more 25 basis points rate hikes to our forecasts for 2019, and now expect the RBI to hike cumulatively by 100 basis points between now and the end of 2019.”Manish Modi of Bloomberg contributed to this story.

Source: Mint July 29, 2018 07:18 UTC