CareEdge Ratings Releases October 2025 Debt & Forex Market Update
Monetary easing, stable yields, and improving FPI inflows mark cautious optimism in October
CareEdge Ratings has published its latest Debt & Forex Market Update – October 2025, offering key insights into global and domestic monetary policy shifts, bond market performance, liquidity trends, and capital flows.
CareEdge Ratings has released its comprehensive Debt & Forex Market Update for October 2025, outlining critical developments across global and domestic markets.
The report highlights that the US Federal Reserve cut its policy rate by 25 basis points in October 2025, signaling a shift toward accommodative monetary policy amid slowing growth. In contrast, the Bank of Japan (BoJ) maintained its policy rate, continuing its cautious stance.
Domestically, slower economic momentum could prompt the Reserve Bank of India (RBI) to consider a 25 bps rate cut in its upcoming December policy review. Meanwhile, banking system liquidity slipped into deficit during the month; however, CareEdge notes that additional CRR (Cash Reserve Ratio) reductions could help restore liquidity in the coming months.
India’s 10-year Government Security (G-sec) yield remained largely stable through October, reflecting balanced market sentiment despite evolving global conditions.
On the commodities front, crude oil prices edged higher in late October, but CareEdge emphasized that current price levels do not pose significant risks to India’s inflation or import bill.
Corporate bond activity showed moderation in Q2 FY26, indicating cautious issuance in a transitioning rate environment. However, net FDI inflows strengthened, supported by a surge in gross foreign investments. After four consecutive months of outflows, Foreign Portfolio Investors (FPIs) returned in October, signaling renewed confidence in India’s macroeconomic outlook.
Additionally, the Indian Rupee appreciated slightly against the US Dollar, aided by improved capital flows and steady fundamentals. Market participants continue to monitor the US-India trade negotiations, which could influence foreign investment sentiment in the near term.
CareEdge Ratings’ analysis underscores a balanced but watchful outlook for India’s debt and forex markets, driven by global monetary shifts, evolving domestic growth conditions, and capital flow dynamics.
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