off-the-wire

INDIA BONDS-India bond yields fall tracking U.S. peers, ends week lower

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Bhakti Tambe MUMBAI, March 24 (Reuters) - Indian government bond yields ended lower on Friday, as well as for the second straight week, mirroring a similar movement in U.S. peers after the Federal Reserve hinted at ending the rate hike cycle soon. The 10-year benchmark 7.26% 2032 bond yield ended at 7.3128%, after closing at 7.3480% on Thursday. The yield fell 4 basis points (bps) this week, after falling 8 bps last week. U.S. Treasury yields dropped on Thursday, a day after the Fed hiked rates by 25 bps but indicated that it is on the verge of pausing further increases after the recent collapse of two U.S. banks. The U.S. 10-year yield fell 10 bps on Thursday to 3.4040% and was last at 3.3150%. The two-year yield was at 3.6619%. The yields were down 8 bps and 18 bps for the week.


Investors now await the Reserve Bank of India's (RBI) monetary policy decision on April 6. The RBI has raised the repo rate by 250 bps since last March to 6.50%. The broad environment is turning slowly but surely conducive to a lower interest rate regime said Sandeep Bagla, Chief Executive Officer of Trust Mutual Fund.


"Despite global uncertainties due to numerous reasons, besides RBI action and local economy variables, we are highly confident that the broad interest rates could fall," Bagla said. Market participants also await the government's borrowing calendar for April-September due next week.


The Indian government's borrowing for April-September is likely to be between 55% and 58% of its gross annual borrowing target of 15.43 trillion rupees. The government is likely to meet the central bank officials on Monday to discuss a plan. (Reporting by Bhakti Tambe; Editing by Sohini Goswami)

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