Bond Market Steady Ahead of RBI Policy: 10-Year Yield Marginally Lower

India's 10-year benchmark government bond yield (IN067934G=CC) dipped slightly on Tuesday, at 6.4747% close, against the day-earlier closing of 6.4836%. This modest fall indicates hesitant trading as traders wait for Wednesday's Reserve Bank of India's (RBI) monetary policy announcement, when it is seen cutting rates by 25 basis points and considering liquidity guidance.

The bond market continues to be driven by international trends, with U.S. Treasury yields firming up after previous volatility. Locally, the RBI has pumped substantial liquidity into the banking system via bond buying and forex swaps, helping economic recovery. Foreign banks, however, have recently sold Indian bonds in the face of global uncertainties.

While the market waits for additional easing steps by the central bank, the movement of the yield reflects investor sentiment tugging in between domestic policy signals and global pressures.

Source: Reuters