Indian bonds 'bounce'

September 05 2008 | Category: India: Economy and finance

Indian ten-year bonds improved for the ninth day in succession, buoyed by falling oil prices, it has been revealed.

Decreases in the cost of crude lessened concerns that the country's rate inflation will climb from an already 16-year high, Bloomberg reports.

Bonds also advanced on the back of a decline in banks' daily borrowings from the central bank, which suggested they are more able to buy debt, according to the news provider.

Dhawal Dalal, who manages $2.2 billion (£1.2 billion) of Indian debt at DSP Merrill Lynch Investment Management in Mumbai, told the company: "We expect bonds to gain further gradually. Oil prices are declining and liquidity in the banking system is comfortable."

Earlier this week, the Economic Times reported claims by Tushar Poddar, vice president of Asia economic research at Goldman Sachs, that Indian exports are likely to remain strong despite the uncertain economic climate.

He said this is because the country's fastest-growing export products are raw materials such as iron ore, metals and refined petroleum, which see strong demand from other emerging markets.
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