At last the debt market has started moving.. At last, RBI Governor indicated that impact of global slow down is severe on India and there is a room to cut rates. Given this news, the Gilts started edging up.
However, I still get surprised that debt market, which is primarily dominated by institutional investors look for such cues. If one talks to a few businessman on the street and assumes that Government and Central bank will do their bit, rate cuts are evident. The question could be how much and when..
If we believe that the slowdown is unprecedented and not seen by most of the people in their careers, then experience based view is irrelevant. Ideally, we should touch historical lows at some point of time.
Obviously given the gains made in the last few months, the new lows would not happen in linear fashion. Patience could be tested..
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