Bond yields traded higher on Friday as the Reserve Bank of India (RBI) has cut interest rate for the first time in nearly five years with an aim to support a shuttering economy. Its Monetary Policy Committee (MPC) has reduced the repo rate by 25 basis points (bps) to 6.25 per cent, after having kept it unchanged at 6.50 per cent for eleven straight meetings, and not having lowered it since May 2020.
In the global market, U.S. Treasury yields were up on Thursday as investors looked ahead to January's nonfarm payrolls report. Furthermore, Crude oil prices were set to end the week with a third consecutive decline as worry about the effect of Trump’s tariffs and China’s retaliation to them dragged benchmarks down.
Back home, the yields on new 10 year Government Stock were trading 16 basis points higher at 6.81% from its previous close of 6.65% on Thursday.
The benchmark five-year interest rates were trading 15 basis points higher at 6.74% from its previous close of 6.59% on Thursday.