India bond traders pricing in a rate cut this year may be disappointed, with local growth good and the US unlikely to go through a recession, according to a top official at Bank of America Corp.
“In the last quarter, the swaps market is pricing a cut in India, which I find very hard to believe,” said Jayesh Mehta, India country treasurer at the US bank said in an interview last week. “Our domestic demand is good, backed up by equally good local growth.”
While the country’s current account deficit may be one factor which might push officials toward one rate cut, “we are not going to pivot back to cutting rates that quickly this year,” he said.
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