Finance & Economy | News & Insights

Debt Market Update – January 2024

Published: February 1, 2024



  • No rate change expected in Fed’s January 30-31 meeting.
  • Markets adjust Fed rate cut expectations for 2024: project a 125bps cut starting in May (versus previous expectation of a 150bps cut starting in March).
  • BoE likely to maintain the policy rate in its February 1 meeting.
  • ECB and BoJ keep rates unchanged in January.
  • ECB officials deem it premature to discuss rate cuts.
  • BoJ Governor notes a growing likelihood of Japan’s inflation remaining near the 2% target.
  • China surprises with a larger-than-expected RRR cut.
  • Crude oil prices rose ~6% last week on improved demand outlook and heightened supply concerns.


  • Liquidity deficit surged to record high of Rs 3.46 lakh crore on January 24.
  • Segments of the yield curve inverted.
  • Liquidity is expected to stay tight in line with RBI’s policy stance however liquidity deficit is likely to moderate amidst RBI’s VRR auctions and month-end government spending.
  • CD issuances crossed Rs 1 lakh crore in December.
  • Central government’s borrowings dipped 18% MoM in January.
  • SDL spreads widened to a near 2-year high as state governments signalled higher borrowings.
  • Corporate bond issuances were at a six-month high in December.
  • FPI debt inflows in December were the highest in over six years.
  • FY25 gross and net borrowings likely to be in the range of Rs 15-15.3 lakh crore & Rs 11.3-11.6 lakh crore, respectively.
  • We expect RBI to cut repo rate by 50bps in CY24 (25bps each in Q3 and Q4).
  • 10Y GSec is likely to trade between 7-7.2% in the near term.


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