Interest rates are set to go down and thus activity in the bond market is heating up. It is widely expected that the Reserve Bank of India, the monetary watchdog will cut its repo rate by at least 25 basis points from the current 8% in its January policy review. Plus, with more easing expected going forward, bond market activity will only increase. Traded volumes in bonds soared to an all-time high of Rs 762 bn on Thursday. This compares with average daily volume of Rs 200 m seen in December. Bond yields have decreased from 8.15% to 7.97%, which will in turn increases the price of bonds. Well, with equities seeing 26% returns in 2012, probably it is time for bond markets to shine in 2013.