Key Points
ICICI Securities Primary Dealership CEO Shailendra Jhingan believes the Reserve Bank of India (RBI) should ignore the increase in US Treasury yields and instead focus on inflation, with particular attention on food prices..
He also said the market was likely to hold its current policy with a 15-20% chance of a rate hike occurring over the next year..
The recent rebound in inflationary pressures has sparked apprehension of whether more rate hikes are in the offing, but if one excludes the volatile movements in vegetable prices, the current levels of the consumer price index may not call for more tightening, Shailendra Jhingan, CEO of ICICI Securities Primary Dealership told Bhaskar Dutta..
We would ignore the rise in US Treasury yields, but if there is a generalised rise in commodity prices due to higher stimulus in China, that could be a worry for the market and it could prompt the RBI to hike rates..
If they're doing that, it seems unlikely that they would want to sell bonds and disrupt the bond market, given that the supply of G-secs is also fairly significant.. Which part of the government bond yield curve would you prefer at the current juncture?..
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