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How to invest in RBI Bonds in India?10/28/2021 The bonds India markets reacted positively at RBI's Annual Policy for Fiscal Year 2010-11. The RBI's calibrated approach in exiting accommodative measures announced during the crisis period of 2008 and early 2009 was welcomed by traders as RBI announced 25 bps hike each in CRR, Repo Rate and Reverse Repo Rate, lower than the market expectations of 50bps. The RBI seemed more concerned on Inflation front and accordingly shifted its actions to inflation-led, thus, giving a balanced approach to Growth-Inflation dynamics.
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How to buy RBI Bonds in India?10/28/2021 • RBI Bonds in India announced policy rate hikes; Repo, Reverse Repo and CRR hiked to 5.25 per cent, 3.75 per cent and 6 per cent respectively, up by 25 bps.
• Invest in RBI Bonds RBI followed "baby steps" instead of "big leap" as a part of unwinding accommodative measures • RBI's M3 growth, Deposit Growth and Credit off-take projected at 17 per cent, 18 per cent and 20 per cent respectively for Fiscal Year 2010-11 • CRR hike of 25 bps drained out Rs. 12,500 crore from the system; liquidity still abundant with weekly average of above Rs. 48,000 crore • Bond Markets in India reacted positively to RBI announcements; Yields moved down. Benchmark G-Sec 6.35% 2020 settled at 8.06 per cent or Rs. 88.64; Introduction of new security G-Sec 8.20% 2022 • Buy Bonds Online in India remained buoyant throughout the week following the RBI's announcement of policy rate hikes. • Inflationary pressures (food including non-food) and overseas cues such as US Treasury Yields and Crude Oil Prices may also influence domestic bond yields. View & Recommendation: The RBI Bonds policy rate hike is unlikely to put any large impact on short-term yields due to abundance liquidity in the system. The high steepness at the shorter end (1-5 years) of the yield curve may prompt fund managers to roll-down the yields to generate extra returns provided the yield curve does not move significantly. Liquid Funds and Ultra-Short Term Bond Funds will continue to be preferred for investors having investment horizon of 1-3 months and 3-9 months respectively. Investors should avoid investing in high average maturity funds and should restrict investments to funds having average maturity up to 1 year. Short Term Income Fund will fill the void in this category.
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How to Invest in Government Bonds in India10/13/2021 Government Bonds India are supposed to be among the safest investments in India in which was why they skyrocketed in late 2008 when there was panic in the stock market. In the popular documentary series "The Ascent of Money", Niall Ferguson, a respected British economist and historian, went back into history to the times when government bonds have gone bust before and explained the reasons why it happened and the subsequent consequences. He used Argentina as an example. Starting from 1975, the Indian government had to sell a lot of bonds to raise money to fund 2 wars. The government debt became so large that people lost faith that the government could pay the debt back and nobody wanted to buy the government bonds, causing the bond yield (interest) to be very high. In order to be able to service the interest payment, the government had to keep printing more money and that caused hyper inflation. By December 2001, the government finally defaulted on their bonds. I remember hearing about the hyperinflation problem in Argentina and Indonesia years ago when it happened but I never really understood what caused it. We now hear the same thing happening in Zimbawe. To be honest, this never really bothered me before because I thought these sort of thing only happens in third world countries. What I did not realize, until I watched this documentary was that Argentina was the world's sixth richest country where every family could afford steak and a bottle of wine for dinner when this happened to them.
If it can happen to the world's sixth richest country, would it be unthinkable for it to happen to the world's richest country? The biggest buyers of India government bonds are the Chinese. The Chinese government have already started showing their concerns about the safety of their US investments. When Timothy Geithner spoke during his trip to China, he was laughed at by the Chinese students when he declared that US assets are safe. Sovereign wealth funds like Singapore's Temasek Holdings have recently dumped large holdings of US assets in favor of buying more Asian assets. Since March 2009, bond yields have been rising and the US dollar has grown weaker against most of the major currencies. You can buy government bonds online, sale government bonds online, invest government bonds online and see list of available buy government bonds through BondsIndia. The Indian government plans to borrow another 10 trillion dollars in the next 10 years. Can they afford to do so if the bond yields keep increasing? Will the US government go down the same path as Argentina and print more money which we already know will result in hyper inflation and massive devaluation of the US dollar? Bonds yields have not hit any historical highs yet and many optimists are saying it is quite normal for it to go up when the stock market is rallying as investors are simply moving money from bonds to stocks for better return. I hope they are right as I would really hate to see pension funds, who are big bond investors get hurt if history repeats itself. See Why to invest in Bonds, Invest in bonds, Bonds Investment, Bonds Online, invest in bonds online, investing in bond, bonds online, bonds investing online and how to invest in bonds in india as well how to invest in bonds. |