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- 10-year government bond yield dipped to a 3-year low.
- The benchmark 10-year government yield has reached 6.6928%.
- It has fallen to its lowest level in nearly three years amid expectations that the domestic central bank would ease interest rates.
- Data has revealed that India’s economic growth has slowed more than expected in the September quarter after that the bond yields have declined.
- India’s domestic output fell to a seven-quarter low of 5.4% last quarter.
- The decline in bond yield and swap rate indicate that the central bank may loosen monetary policy via a lower cash reserve ratio (CRR) for banks.
- The market is estimating a cut in the CRR by 50 bps could release over 1.1 trillion rupees ($13 billion) into the banking system.
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