Pre June mid quarter monetary policy:
Bond yields edged higher in early deals on account of prevailing caution ahead of RBI’s monetary policy review. After obliging the street thrice with rates cuts for 2013, RBI this time around is largely expected to keep policy rates, CRR unchanged at the prevailing levels.
On the global front, US government debt prices edged slightly higher on Friday as traders bet the Federal Reserve would keep interest rates near zero for a protracted period to help the economy even if the bank slows its bond buying this year.
Back home, the yields on 10-year 7.16% - 2013 bonds were trading 2 basis points higher to 7.33% from its previous close of 7.31% on Friday.
The benchmark five-year interest rate swaps were trading 1 basis point higher at 6.98% from its previous close of 6.97% on Thursday.
Post June mid quarter monetary policy:
In a reaction to the much expected RBI’s stance in its mid-quarter policy review on June, bond yields edged lower.
Warning of upward risks to inflation posed by a falling rupee and increase in food prices, Reserve Bank of India (RBI) in its June mid quarter monetary policy , as expected left repo rate unchanged at 7.25% and kept the cash reserve ratio (CRR), or the share of deposits banks must keep with the central bank, steady at 4%.
The yields on 10-year 7.16% - 2013 bonds were trading 1 basis point lower at 7.30% from its previous close of 7.31% on Friday.
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