Debt Market Outlook ? March 2023

Key highlights

• Indian sovereign yield curve to turn steeper with short-term yields easing while long-term yields remaining sticky.

• RBI raise Repo rate by 25 basis points to 6.5% in Feb MPC

• Hawks within MPC may point out to sticky core inflation and the need to remain vigilant.

• We expect 364-day T-bill yield to ease from its current level of 7.35% as market unwinds further rate hikes.

• Investors to consider target maturity bond ETF and index funds maturating between 5 years to 10 years.