INR 5Y Watchlist
Alpha Bites: Pay India 5y Vs Receive Mexico 5y Local Rate
FX & Rates
192 Views, 10 Jan 2022 22:45
- With rates in India vulnerable to a further correction in the US, I recommend paying India 5y vs receiving Mexico 5y rate in a beta-neutral ratio.
- Real rates in India are the lowest among major emerging countries, which along with rising inflation expectations and strong growth should pressure the RBI to raise rates soon.
- Mexico is appealing as a receiver against paying in India because the central bank is further along in its monetary tightening cycle as is evident from the high real rates.