Bond yields traded higher on Thursday despite Fitch Ratings’ statement that India’s medium-term growth potential is at around 6.5% but weak implementation of reforms, combined with continued financial sector problems, could lower its potential. It said the revival of the reform agenda is among the Indian government’s policy responses to the Covid pandemic shock.
In the global market, U.S. Treasury yields ended little changed on Wednesday after the inauguration of President Joe Biden, who has pledged to revive a battered U.S. economy with $1.9 trillion in stimulus, and as $24 billion of 20-year Treasury bonds were sold at auction. Furthermore, oil prices fell after data showed U.S. crude stocks unexpectedly rose last week, reigniting worries about pandemic restrictions cutting into fuel demand.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 5.95% from its previous close of 5.94% on Wednesday.
The benchmark five-year interest rates were trading 2 basis points higher at 5.28% from its previous close of 5.26% on Wednesday.