Bond yields traded higher on Thursday. Meanwhile, Reserve Bank of India (RBI) lowered risk weights for bank finance to NBFCs and microfinance loans, a move that will unlock more funds and boost credit. A lower risk weight means that lenders need to set aside less funds as a safety net for consumer loans, implying an increase in their lending capacity.
In the global market, 10-year Treasury note yield slipped on Wednesday as concerns over an escalating trade war and weak economic growth led traders to send bond prices higher. Furthermore, oil prices fell to two-month lows on Wednesday as a surprise build in U.S. fuel stockpiles signalled demand weakness and a potential peace deal between Russia and Ukraine continued to weigh on prices.
Back home, the yields on new 10 year Government Stock were trading 12 basis points higher at 6.82% from its previous close of 6.70% on Tuesday.
The benchmark five-year interest rates were trading 12 basis points higher at 6.73% from its previous close of 6.61% on Tuesday.
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