Bond yields edged higher on Thursday as investors remained cautious ahead of the RBI's monetary policy to be announced later in the day. The monetary policy committee is likely to leave the repo rate at 6.25%, where it has been since October. However, market participants are expecting the RBI to announce measures to absorb liquidity that has accumulated post demonetization.
On the global front, U.S. Treasury yields fell on Wednesday, with three- and five-year yields touching more than five-week lows after traders viewed the latest Federal Reserve meeting minutes as indicating the central bank was maintaining an outlook for a gradual pace of interest rate increases. Furthermore, Oil prices fell as record U.S. crude inventories underscored that markets remain bloated by high production and brimming storage despite efforts led by OPEC to cut output and prop up prices.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 6.69% from its previous close of 6.65% on Wednesday.
The benchmark five-year interest rates were trading 1 basis point higher at 6.84% from its previous close of 6.83% on Wednesday.