India's 10-year bond yield dropped below 7 per cent for the first time in 18-months, as low GDP numbers raised expectations of an interest rate cut. The 10-year bond yield was last seen trading at 6.95 per cent.

The Reserve Bank of India is likely to cut interest rates in its policy meet, when a decision is taken on June 6. Some are expecting an interest rate cut of as much as 0.50 per cent. The country's central bank had slashed interest rate by 25 basis points in Feb 2019 and April 2019 to boost growth. With retail inflation well below the RBI's targeted level of 4%, the RBI is almost certain to cut interest rates.

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