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RBI Shock Pause Pushes Up Borrowing Costs for Indian Companies
Uncertainty about RBI’s future monetary policy moves may spur volatility and push up borrowing costs further for companies.
09 Dec 2019, 02:47 PM IST 
An Indian national flag flies at the Reserve Bank of India (RBI) building in Mumbai, India. (Photographer: Kanishka Sonthalia/Bloomberg)
(Bloomberg) -- The Reserve Bank of India’s surprise rate pause on Thursday is bad news for the nation’s companies, which are struggling with a prolonged cash squeeze.
Yields on top-rated five-year rupee corporate bonds jumped a combined 25 basis points on Thursday and Friday, the biggest two-day gain in 10 months.
Uncertainty about the central bank’s future policy moves may spur increased volatility and push up borrowing costs further for companies, the last thing they need now.
--With assistance from Beth Thomas.
To contact the reporter on this story: Anurag Joshi in Mumbai at ajoshi53@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Finbarr Flynn, Matt Turner
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