RBI Is Trying to Control Pace of Yield Rise, IDFC Says

The video discusses the Reserve Bank of India's (RBI) strategies for managing the yield curve amidst global yield surges, emphasizing the control of yield pace rather than levels. It explores the constraints of monetary policy, both globally and locally, and the potential inclusion of Indian bonds in global indices. The RBI's bond operations, including 'operation twist', are analyzed for their impact on the market. Additionally, the video examines the rupee's strength and the RBI's shift towards a flexible inflation targeting regime, highlighting its approach to forex reserves.

What is the primary goal of the RBI in managing the yield curve?

• To set a fixed yield level

• To control the pace of yield changes

• To eliminate yield fluctuations

• To increase global yields

What is one of the challenges faced by the RBI in managing borrowing costs?

• Excessive liquidity in the market

• Abundance of risk capital

• Global monetary policy constraints

• Lack of global monetary policy constraints

What is the relationship between risk capital and liquidity in the bond market?

• They are different and independent

• They are the same

• Risk capital is always higher

• Liquidity always translates to risk capital

What could be a game changer for the Indian bond market?

• Decrease in foreign investments

• Increase in domestic borrowing

• Reduction in global yields

• Inclusion in global bond indices

What is the impact of India's cyclical recovery on offshore investor interest?

• It decreases interest

• It has no impact

• It potentially increases interest

• It leads to immediate investment

How does the RBI's shift to a flexible inflation targeting regime affect its policy?

• It focuses solely on inflation control

• It allows inflation to fluctuate around 4%

• It mandates a fixed inflation rate

• It eliminates the need for foreign exchange reserves

What is the RBI's approach to foreign exchange reserves in light of flexible inflation targeting?

• To reduce reserves

• To eliminate reserves

• To maintain a fixed reserve level

• To increase reserves as a buffer