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Mint
2 days ago
- Business
- Mint
India bonds seen steady, rate cut bets to be key driver
MUMBAI, July 21 (Reuters) - Indian government bond yields are expected to start the week range-bound as traders continue to look out for major triggers, with eyes on the development of bets on further monetary policy easing from the central bank. The yield on the benchmark 10-year bond is likely to trade between 6.30% and 6.32%, a trader at a private bank said, after closing at 6.3058% on Friday. The five-year 6.75% 2029 bond ended at 5.9665%. "From now until the monetary policy decision, we do not have any major data points, and hence reaction, if any, would be driven by the change in expectations for a rate cut in August," the trader said. The Reserve Bank of India's policy decision is due on August 6, and comes after the central bank slashed key interest rate by 50 basis points in June and changed its stance to neutral from accommodative. India's retail inflation slipped to 2.10% in June, the slowest pace in more than six years, down from 2.82% in May. An estimated drop in inflation to a record low in July is prompting calls for at least one more rate cut this year, with some saying the chances of a rate cut in August cannot be ruled out. "The recent inflation surprise and the comfortable inflation trajectory going ahead have made the August policy live for a rate cut," said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank. Focus would also remain on the RBI's liquidity management after the central bank withdrew 2 trillion rupees ($23.22 billion) through a seven-day variable rate reverse repo on Friday. RATES India's overnight index swap rates (OIS) are also expected to be range-bound amid a lack of strong cues on interest rates. The one-year OIS rate ended at 5.4950% and the two-year OIS rate at 5.47%. The liquid five-year finished at 5.70%. KEY INDICATORS: ** Benchmark Brent crude futures 0.1% higher at $69.35 per barrel after easing 0.4% in the previous session ** Ten-year U.S. Treasury yield at 4.4310%; two-year yield at 3.8750% ** India to buy short-term bonds and sell long-term bonds worth up to 320 billion rupees ($1 = 86.1300 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)
News18
5 days ago
- Business
- News18
CPI Inflation In June 2025 Falls To 2.1%, Lowest Since January 2019
The NSO says the significant decline in inflation in June 2025 is mainly attributed to favourable base effect and decline in inflation of vegetables, pulses and products. India's retail inflation, based on the Consumer Price Index (CPI), declined to 2.1 per cent in June 2025, according to the latest official data released on Monday, July 14, 2025. It is the lowest inflation print after January 2019. The CPI-based inflation had stood at 2.82 per cent in May 2025 and 5.08 per cent in June 2024. 'Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of June 2025 over June 2024 is 2.10% (provisional). There is a decline of 72 basis points in the headline inflation of June 2025 in comparison to May 2025. It is the lowest year-on-year inflation after January 2019," the National Statistics Office (NSO), under the Ministry of Statistics & Programme Implementation, said in a statement on Monday. The previous low of 1.97 per cent was recorded in January 2019. The NSO said the significant decline in headline inflation and food inflation in June 2025 is mainly attributed to favourable base effect and decline in inflation of vegetables, pulses and products, meat and fish, cereals and products, sugar and confectionery, milk and products and spices. Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, said, 'The softer-than-expected headline inflation comes on the back of moderating food prices. However, core inflation has ticked up. Overall, the high-frequency mandi prices suggest food prices remain largely muted, except for few vegetable prices. We expect the FY26 inflation to undershoot RBI's estimates of 3.7% by around 50 bps. While comfortable inflation opens room for further monetary easing, we expect the RBI to maintain a pause in the coming 1-2 meetings and remain watchful of the transmission ahead along with global uncertainties." Meanwhile, according to the latest data release separately by the commerce ministry, wholesale price inflation (WPI) declined to (-) 0.13 per cent in June as prices of food articles and fuel saw deflation, along with easing in manufactured product costs, government data showed on Monday. WPI-based inflation was 0.39 per cent in May. It was 3.43 per cent in June last year. Last month, the Reserve Bank of India (RBI) revised its retail inflation projection for FY26 to 3.7%, down from its earlier estimate of 4%. This marks the lowest average retail inflation forecast by the central bank in recent years. The downward revision came alongside a surprise 50 basis points repo rate cut, bringing the key policy rate down to 5.5%, and a 100-bps CRR reduction as the RBI signalled confidence in the easing of price pressures amid a supportive global and domestic backdrop. However, RBI Governor Sanjay Malhotra said, 'While food inflation outlook remains soft, core inflation is expected to remain benign with easing of international commodity prices in line with the anticipated global growth slowdown. The inflation outlook for the year is being revised downwards from the earlier forecast of 4.0 per cent to 3.7 per cent." The next RBI MPC meeting is scheduled for three days between August 4 and August 6. view comments First Published: July 14, 2025, 16:16 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
14-07-2025
- Business
- Mint
India bond yields inch up tracking US peers
MUMBAI, July 14 (Reuters) - Indian government bond yields ended higher on Monday, as traders reacted to elevated U.S. Treasury yields, while looking through a sharp decline in local retail inflation that was largely factored in. The yield on the benchmark 10-year bond ended at 6.3163%, compared with a previous close of 6.2994%. Still, so-called ultra long bond yields declined for a second straight session as investors continued to chase 30-year to 50-year papers. The 30- to 50-year bond yields eased by around 3 bps, after a large state-run player bought a chunk of 50-year bonds on Friday. India's annual retail inflation slowed to 2.10% in June, the lowest since January 2019. The pace of price rise was slower than 2.82% in the previous month, government data showed on Monday, as well as against an estimate of 2.50% in a Reuters poll of 50 economists. "Bonds will largely remain rangebound, with a bias for yields to move up," said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank. The 10-year U.S. yield rose 8 basis points on Friday and stayed elevated on Monday as traders worried about potentially higher inflation rates in the world's largest economy. The U.S. retail inflation print, due after Indian market hours on Tuesday, is expected to show a 0.3% month-on-month gain, up from 0.1% in May, according to a Reuters poll. "The US treasuries witnessed some sell off on continuing fiscal concerns and Fed minutes that indicated no rate cuts in the near term," said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank. India's short-term overnight index swap rates moved lower amid receiving interest after the local inflation data release, while long-end rates saw paying due to the rise in U.S. yields. The one-year OIS rate ended at 5.54% and the two-year OIS rate was up 2 basis points at 5.51%. The liquid five-year rose nearly 4 basis points to 5.74%. (Reporting by Dharamraj Dhutia; Editing by Ronojoy Mazumdar)
Economic Times
12-06-2025
- Business
- Economic Times
Retail inflation eases to over six-year low of 2.82% in May
TIL Creatives Representative image India's retail inflation eased to more than six-year low of 2.82% in May 2025, government data released on Thursday showed. This marks a 34 basis point drop compared to April 2025 and is the lowest year-on-year inflation recorded since February inflation in May was the lowest since February 2019.A Reuters poll of 50 economists had forecast retail inflation in May to ease to 3%.The significant easing in May was largely driven by a sharp decline in food inflation, favourable base effects, and lower price increases in essential inflation cooled sharply to 0.99% in May 2025 from 1.78% in April, a decline of 79 basis points. Rural food inflation stood at 0.95%, while urban food inflation was 0.96% in May. May food inflation was the lowest since October 2021, the statement said."ICRA expects the CPI-food and beverages inflation to ease further in June 2025, supported by a favorable base. This is expected to pull down the headline CPI inflation print to ~2.5% in the month. Notwithstanding the early arrival of the South-west monsoon, the progression of the same has halted in early-June 2025," Aditi Nayar, Chief Economist and Head, Research & Outreach, ICRA Ltd, said."Going forward, the temporal and spatial distribution is crucial to ensure favourable increase in crop yields; excessive rainfall concentrated during short periods of time could destroy the standing crops and thereby remains a key monitorable," added ICRA's Aditi Nayar. This marks the fourth consecutive month that inflation has stayed below the Reserve Bank of India's (RBI) medium-term target of 4% and has been lower than the central bank's tolerance ceiling of 6% for seven straight months. The data comes nearly a week after the RBI's Monetary Policy Committee (MPC) cut the benchmark repo rate by 50 basis points to 5.5%, the third consecutive rate cut this year. The policy stance was also shifted from 'accommodative' to 'neutral', indicating a more balanced approach to growth and inflation management going forward. "While the overall inflation trajectory is expected to remain benign, the recent frontloaded policy actions and the guidance of limited room for incremental easing suggests prolonged pause for now, with further actions being highly data dependant," Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, said. Vegetable prices registered a year-on-year decline of 13.7% in May, from an 11% drop recorded in inflation moderated, with prices rising 4.77% in May compared to 5.35% in the previous of pulses saw a steeper fall, dropping 8.22%, compared to a 5.23% decline in April."Selected perishable food groups were up modestly on a sequential basis but moderated on annual terms, aiding the headline. Benign core-core prints point to economic slack, supporting recent moves to frontload monetary and liquidity stimulus. Monsoon developments warrant attention, after progress stalled following an early onset. For the full year, we expect inflation to average below 4%, aligning with our core-core measures," Radhika Rao, Executive Director and Senior Economist at DBS decline in both headline and food inflation was largely driven by slower price increases in pulses and products, vegetables, fruits, cereals and products, household goods and services, sugar and confectionery, and eggs, the government noted. "Today's print further confirms the moderating inflation trend witnessed over the last few months on the back of healthy agriculture supply. We expect the next inflation print to also be close to or below 3%. Beyond that, the progress of the monsoon season could become critical to gauge any risk of food inflation spikes," Sakshi Gupta, Economist at HDFC Bank, told Reuters. In rural India, headline inflation eased to 2.59% in May from 2.92% in April 2025, with rural CFPI at 0.95% in May compared to 1.85% the previous month. In urban areas, headline CPI dropped to 3.07% in May from 3.36% in April, while urban CFPI fell from 1.64% to 0.96%.The year-on-year inflation in the fuel and light category eased slightly to 2.78% in May 2025, compared to 2.92% in April. This combined rate, covering both rural and urban sectors, reflects a marginal softening in prices within the category during the month. Meanwhile, urban housing inflation edged up slightly, rising to 3.16% in May from 3.06% in April FY26, the central bank revised its CPI inflation forecast down to 3.70%, from the earlier projection of 4% made in April. The quarter-wise breakdown now stands at: Q1: 2.9%, Q2: 3.4%, Q3: 3.5%, Q4: 4.4%. The MPC observed that while inflation has softened considerably since breaching the tolerance band in late 2024, global uncertainties and supply-side risks continue to warrant close monitoring. Nonetheless, the RBI had said the inflation outlook is 'evenly balanced' and projected further easing in price pressures in the coming months. 'Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target, with signs of broad-based moderation,' RBI Governor Sanjay Malhotra said in his post-policy address.
India Today
30-05-2025
- Business
- India Today
India's economic growth hits 4-year low of 6.5% in FY25
India's economy grew by 6.5% in the financial year 2024-25 (FY25), marking its slowest pace in four years, according to data released by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) on figure is lower than the previous year's growth and shows a cooling down in the overall economic activity. In comparison, the Indian economy grew at a much faster pace during the pandemic recovery to the government's statement, 'Real GDP has been estimated to grow by 6.5% in FY 2024-25. Nominal GDP has witnessed a growth rate of 9.8% in FY 2024-25.' The government has also slightly lowered its earlier forecast for nominal GDP growth, which was 9.9%. While the full-year GDP number has slowed, data for the last quarter of FY25 painted a better picture. The real GDP growth for the March quarter (Q4) stood at 7.4%, which is the fastest among all four quarters of the in the third quarter climbed to 6.2%, up from the previously estimated 5.6%.With these latest numbers, India remains among the world's fastest-growing economies. The International Monetary Fund (IMF) also projects that India will overtake Japan in economic size by the end of the year, reaching $4.18 GDP growth for the same quarter came in at 10.8%.'The Q4 FY25 GDP numbers are marginally higher than our expectations but broadly track the government's earlier estimate. The GVA estimate, however, remains more tepid at 6.8%. Expectedly, the high net indirect tax growth has led to the wide gap between the two," said Upasna Bhardwaj, Chief Economist, Kotak Mahindra high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter. We expect the benign inflation and soft growth to continue to provide the MPC room for incremental monetary easing, with 25 bp cut in the upcoming June policy," she consumption rose by 7.2% year-on-year, up from 5.6% in the previous fiscal. This increase was supported by stronger rural demand, helped by easing food prices and increased spending during the festive season compared to the previous witnessed a growth of 4.6% in FY25, a notable rise from 2.7% in the previous year. During the fourth quarter, the sector expanded by 5.4%, a sharp jump from just 0.9% in the same quarter a year construction industry recorded a year-on-year growth of 9.4%, slightly below the 10.4% growth in the preceding year. However, in the March 2025 quarter, the sector expanded by 10.8%, up from 8.7% in Q4 saw a slowdown, growing by 4.5% in FY25 compared to 12.3% in the previous fiscal. For the fourth quarter, manufacturing rose by 4.8%, down from 11.3% during the same period last Watch
