India's benchmark 10-year bond yield at 16-1/2 month low post RBI policy

MUMBAI: India's benchmark 10-year bond yield dropped to its lowest level in 16-1/2 months on Tuesday after the central bank's monetary policy statement raised hopes for a rate cut in the early part of 2015.

The Reserve Bank of India held interest rates steady as widely expected at a policy review and said it could ease monetary policy early next year provided inflationary pressures do not reappear and the government controls the fiscal deficit.

The benchmark 10-year bond yield was trading down 7 basis points on the day at 7.99 percent by 2:05 p.m. (0835 GMT), its lowest level since July 22, 2013.