RBI Deputy Governor Reports Strong Indian Bond Market Performance

Reserve Bank of India Deputy Governor Poonam Gupta reported in the RBI's September Bulletin that India's bond market has performed well relative to its own history and other nations. She attributed this strength to the government's fiscal commitment, projected high economic growth, monetary policy credibility, and reduced structural inflation pressures.

Gupta noted a divergence in performance, stating that Indian equity markets have not shown the same optimism. She suggested this is partly because of more promising AI-led growth stories in other economies, though she projected that Indian equities will become attractive again as the underlying real economy reasserts itself.

Regarding national financial stability, Gupta highlighted the resilience of India's balance of payments. She noted that the current account deficit remains below 1 percent of GDP, a level she described as remaining far below what is generally considered prudent for emerging market economies, supported by strong remittances and services exports.