Indian bond yields drop before purchasing the central bank debt

By Khushi Malhotra Mumbai, April 17 (Reuters) – The returns of the Indian government bonds dropped in early transactions on Thursday before the purchase of the central bank and the government’s debt auction planned later that day. The measure of 10-year bonds was 6,3793% from 10:20 am, compared to the previous closure of 6,3889%. The return dropped to 6,3730% earlier in the day, the lowest level since December 16, 2021. “We easily broke below the 6.40% levels on the ten years and the decline was sustained, which is an indication that there may be a further decline in the returns in the coming week,” a trader said at a state -controlled bank. Bulls in the Indian bond market have led yields lower, with the return of ten years by 20 basis points (BPS) since the beginning of the fiscal on April 1. Yields are likely to decline further as the central bank continues its rate reduction cycle. Yields on shorter expensive effects have exceeded those in the 10-year benchmark, with five years of returns until so far in April by 35 BPS. The Reserve Bank of India (RBI) will buy 400 billion rupees ($ 4.68 billion) on Thursday that ripen from 2028 to 2039 on Thursday, while the central government will sell a 300 billion rupee bonds, which effectively has a negative net offer for the day. The RBI has already bought bonds worth 400 billion rupees this month and is a similar quantum later in the month. From April 16, the liquidity surplus of the banking system remained approximately 1.7 trillion rupes, but has risen constantly since the end of March. Rates The most liquid one year has not yet been traded on Thursday, while the two years OIS was 5.54%flat, and the five-year OIS rate also changed little at 5.67%. As investors price in more rate cuts, EIS rates are likely to continue to decline, especially at the shorter end of the yield curve, which is more sensitive to interest rate movements. ($ 1 = 85,5500 Indian rupees) (Reporting by Khushi Malhotra editing by Sonia Ceema) first published: 17 Apr 2025, 10:27 am Ist