($1 = 81.9750 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Savio D'Souza)
By Dharamraj Dhutia
MUMBAI, April 5 (Reuters) - Indian government bond
yields ended lower on Wednesday, mirroring the movement in their
U.S. peers, while investors shifted focus to the Reserve Bank of
India's (RBI) monetary policy decision due on Thursday.
The 10-year benchmark 7.26% 2032 bond yield ended at 7.2750%, after closing at 7.3142% on Monday. Indian
financial markets were shut on Tuesday.
"The main trigger would be whether the central bank hikes
rates or not and what is the future guidance," said Naveen
Singh, head of trading at ICICI Securities Primary Dealership.
The RBI is expected to raise interest rates for the seventh
consecutive time on Thursday, with a 25-basis point (bps) move
to take the repo rate to a seven-year high of 6.75%.
The RBI raised the repo rate by 250 bps last financial year
as India's retail inflation stayed above the central bank's
upper tolerance level of 6% for most of the year, including in
January and February.
Still, most market participants expect the central bank to
go on a prolonged pause after a final rate hike in this cycle.
On the day, bond yields eased as U.S. yields fell on Tuesday
after data showed job openings in February dropped to a near
two-year-low, implying the labour market is finally cooling and
could allow the Federal Reserve to ease up on monetary policy.
The two-year Treasury yield had dropped over 20 bps in the
last two sessions and was at 3.86%, while the 10-year yield
eased by 15 bps and was last at 3.36%.
The Indian government will start this year's borrowing
programme on Thursday by selling bonds worth 330 billion rupees
(about $4 billion), which includes a new five-year paper as well
as a 2033 note that will soon replace the existing benchmark
bond.
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