India bond yields ease in cautious trade before rate decision

MUMBAI: Indian federal bond yields fell slightly in cautious trade as some investors held on to the view that the central bank may reduce the cash reserve ratio for banks to ease a cash crunch even after it highlighted inflation risks in a report on Monday.

At 9:21 a.m. (0351 GMT), the 10-year benchmark bond yield was at 8.16 percent, down from Monday's close of 8.17 percent, after slipping to 8.14 percent in early trade.

The Reserve Bank of India will announce its rate decision at 11:00 a.m. (0530 GMT). It is likely to hold its key interest rate steady, a Reuters poll of 22 economists showed.

Late on Monday, the RBI said the growth outlook and business climate have weakened but warned of upwards risks to inflation.