Bond yields edged lower on Thursday, on sustained demand from corporates and banks. Bond sentiments got some support after the Reserve Bank of India (RBI) decided to cut its key policy rate, or the repo rate, by 25 bps to 6%, which was in line with market expectations.
In the global market, long-dated debt yields fell, and the yield curve flattened to its lowest levels in a week, after the U.S. Treasury Department said it was still considering an ultra long bond, but didn't announce a new issue. Furthermore, oil dipped as a rally that has pushed up prices by almost 10 percent since early last week lost momentum despite renewed signs of a gradually tightening U.S. market.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 6.45% from its previous close of 6.47% on Wednesday.
The benchmark five-year interest rates were trading 6 basis points lower at 6.45% from its previous close of 6.51% on Wednesday.