For Quick Alerts
For Daily Alerts

Bond Market Cheers RBI Rate Cut Move


After the RBI delivered repo rate cut for the third time in a row and signalled further easing go ahead, 10-year benchmark bond yield was dragged down by 9 basis points to a new 18-month low of 6.933% versus previous close of 7.02%. Bond prices and bond yield share an inverse relationship i.e. when bond prices increase, bond yield decreases.

Bond Market Cheers RBI Rate Cut Move

The six-member Monetary Policy Committee voted for a rate cut and lowered the repurchase or repo rate by 25 bps to 5.75%, its lowest level in 9 years. Also the central bank changed its policy stance from 'neutral' to 'accommodative'. At the same time, it has revised its growth forecast for the FYY 2019-20 lower to 7% from the earlier projected level of 7.2% in April.

Inflation forecast for the first half of FY20 has been revised higher to 3-3.1% from 2.9-3% in April.

As per analysts, lowering of the growth forecast indicates more easing by the RBI.

The rupee also ended the session flat at 69.28 per US dollar in comparison to the previous close of 69.26.

Read more about: bond repo rate mpc rbi liquidity
Story first published: Thursday, June 6, 2019, 18:28 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more