Despite strong H1 GDP growth of 8%, traders expect a dovish RBI stance and a bond purchase calendar to ease yields

Govt bond yields seen softening amid expectation of OMO calendar

Market Anticipation Builds Ahead of RBI's Monetary Policy Review

As the market digests the GDP growth data for the first half of the current financial year, government bond yields are expected to ease this week, ahead of the Reserve Bank of India’s (RBI) monetary policy review meeting.

The RBI's policy review meeting is scheduled for Friday, and while there is an expectation of a status quo in the policy review meeting given strong Q2 GDP growth numbers, optimism is also building around a potential announcement of an open market operation (OMO) calendar to purchase government bonds.

Expected OMOs and its Impact

Market expects an announcement of OMOs worth more than ₹2 trillion on Friday.
OMOs are expected to ease government bond yields.
Potential announcement of OMOs could boost market sentiment.

India's Real GDP Growth

India's real GDP growth numbers are expected to play a crucial role in the RBI's monetary policy review meeting. The strong Q2 GDP growth numbers have raised optimism about the country's economic recovery.

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