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Bond market rally likely to run out of steam

Indian bond yields have recently fallen to their lowest levels since 2013, in large part due to anticipation that the successor to Governor Raghuram Rajan at the RBI will be more dovish. But with the RBI facing a tough challenge in meeting its inflation targets, we still see little scope for further monetary easing. As such, we doubt that bond yileds will fall much further from here.

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