Yield curve shows India's better long-term growth prospects: RBI paper

The bond yield curve indicates an improvement in India’s long-term growth prospects and increase in inflation expectations, as also a tighter monetary policy in the coming days, a Reserve Bank of India research paper authored by Deputy Governor M D Patra and other researchers observed.

“The yield curve is indicating an improvement in long-term growth prospects and an upshift in ex-ante inflation expectations,” the study said. “At the same time, the fact that the yield curve has become steeper and concave reconfirms expectations of tighter monetary policy in the period ahead.”

The report found that in the Indian context it