Bond yields edged lower on Wednesday as banks are using extra cash to buy more government papers due to tepid credit demand. After government’s move to abolish high-denomination banknotes, the liquidity in the banking system rose substantially.
In the global market, U.S. Treasury prices fell on Tuesday as stocks gained, reducing demand for safe-haven assets and with no new economic data to give further indications of the strength of the U.S. economy. Furthermore, oil prices nudged higher on expectations of a U.S. crude inventory draw, although trading activity was muted as markets start to wind down ahead of the Christmas weekend.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.47% from its previous close of 6.48% on Tuesday.
The benchmark five-year interest rates were trading 1 basis point lower at 6.62% from its previous close of 6.63% on Tuesday.