Bhatia: Stay Away From Lower Rated Credits

The transcript discusses the Reserve Bank of India's proactive monetary policy and its impact on the Indian bond market. It highlights the potential effects of bond inclusion on demand and supply dynamics, and compares Indian bonds' performance with global peers. The discussion also covers the challenges and risks associated with bond inclusion, such as FDI inflows and borrowing levels. Additionally, the transcript addresses global rate hikes, particularly by the Federal Reserve, and their implications for India's monetary policy and liquidity conditions.

What is the main reason for the comfort in Indian yields as discussed in the first section?

• Potential bond inclusion

• Rising global interest rates

• Higher government borrowing

• Increased foreign direct investment

What is the main focus of the RBI's proactive measures in the bond market?

• Enhancing global trade

• Increasing foreign investments

• Front loading monetary policy

• Reducing government debt

What is the expected terminal rate mentioned in the second section?

• 4%

• 7%

• 5%

• 6%

According to the third section, what is a potential challenge of bond inclusion?

• Lower demand for IG bonds

• Increased FDI inflows

• Introduction of new investors

• Decreased government borrowing

How does the bond inclusion narrative affect Indian bonds' performance compared to global peers?

• It causes Indian bonds to underperform

• It has no effect on performance

• It leads to increased volatility

• It helps Indian bonds outperform

What is the impact of the Federal Reserve's aggressive rate hikes on the Reserve Bank as discussed in the final section?

• It allows the Reserve Bank to maintain current rates

• It has no impact on the Reserve Bank

• It puts pressure on the Reserve Bank to match rate hikes

• It forces the Reserve Bank to lower rates

What role do other central banks play in the context of global rate hikes?

• They decrease the availability of money

• They have no impact on the Reserve Bank

• They provide a sound check to the strengthening dollar

• They increase pressure on the Reserve Bank