India MPC minutes for the Dec policy meeting were largely along the lines of the policy statement (wherein the committee held rates, with 4 members voting in favor of the outcome). India government bond yields opened mildly lower on Monday tracking global benchmarks, with 1Y OIS also broadly steady. Most members noted adverse growth inflation dynamics since the Oct policy meeting but were divided over the tool mix for supporting growth conditions in the backdrop of higher inflation. We expect rates to trade in a tight range this truncated week, with most participants away for Christmas and Year-end festivities. Liquidity conditions remain in deficit, with deficit as on 20th Dec at INR 1.75tn (without adjusting for daily CRR imbalances). This is after quarterly advance tax outflows, though some respite is to be seen with GOI month-end spending
