New Delhi, Aug. 30 -- The Reserve Bank of India's foreign-currency mobilisation has temporarily eased financial conditions and given the central bank more room to hold off on rate hikes, but the effect could prove short-lived as inflation, global interest rates and rupee weakness pose renewed risks, according to a research report by Systematix.

The domestic brokerage firm said FCNR(B) inflows have steepened the yield curve, pulling the five-year government bond yield down to around 6.47, while the 10-year yield has remained firmer at about 6.85 per cent. The easier financial conditions have reduced the immediate need for monetary tightening, although Systematix expects this calm to be fragile.

The report projects a potential 125-basis-p...