Bond yields edged lower on Thursday despite the Reserve Bank of India (RBI) has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent at its first Bi-monthly policy of the Fiscal Year 2023-24 (FY24), even as inflation is trending above its tolerance level.
In the global market, Treasuries yields slid further on Wednesday after reports on private payrolls and the U.S. services sector pointed to a cooling economy and added to market speculation that the Federal Reserve might pause its hiking of interest rates in May. Furthermore, Oil prices settled largely unchanged on Wednesday, despite greater-than-expected draws in U.S. crude and fuel stockpiles, as the market weighed worsening economic prospects against expectations of U.S. crude inventory declines and plans by OPEC+ producers to reduce output.
Back home, the yields on new 10 year Government Stock were trading 6 basis points lower at 7.21% from its previous close of 7.27% on Wednesday.
The benchmark five-year interest rates were trading 3 basis points lower at 7.09% from its previous close of 7.12% on Wednesday.