MUMBAI: Indian federal bond yields fell sharply in early trades on Monday as rate cut hopes rose after the the prime minister said that economic growth would be lower than earlier forecast.
Prime Minister Manmohan Singh said on Sunday that the Indian economy would likely grow about 7 percent this fiscal year, lower than a revised forecast of about 7.5 percent growth issued by his government last month.
Traders said that sentiment was also boosted by a successful buyback, which would help boost liquidity.
After markets closed on Friday, the Reserve Bank of India said it bought back 84.71 billion rupees ($1.60 billion) of bonds versus a target of 120 billion rupees.
The 10-year benchmark bond yield was at 8.15 percent, sharply lower than Friday's close of 8.22 percent.
Interest rates in India have peaked and economic growth concerns are back on the centre stage, Subir Gokarn, a deputy Governor at the RBI had said last week.
Comments
Comments are closed for this article.