Mumbai: Government 10-year bond prices fell on Monday after the Reserve Bank of India (RBI) Governor, Shaktikanta Das, said future interest-rate cuts would be depend on incoming data. Gains in crude oil for second consecutive sessions also weakened sentiments as it stoked fears of higher inflation and fiscal slippage.
The 10-year bond yield rose 7 basis points (bps) to 6.433% from its Friday’s close of 6.364%. Bond yield and prices moves in opposite direction.
RBI’s future policy action will depend on incoming economic data after a series of moves this year that Governor Shaktikanta Das says are equivalent to 100 bps of interest-rate cuts, Bloomberg News said.
“The accommodative stance will depend on how inflation numbers look, how the growth numbers look. Primarily on how inflation looks,” Bloomberg reported quoting Das.
Meanwhile, the Indian rupee weakened along with Asian currencies as a stronger dollar weighed after traders scaled back bets for a half-point rate cut by the Federal Reserve this month.
The currency opened at 68.91 a dollar, At 9.15 am, the rupee was traded at 69.05, down 0.34% from its previous close of 68.81.
St. Louis Fed President James Bullard on Friday downplayed talk of an easing cycle and said he favored a quarter-point cut.
In pre-trade, the benchmark Sensex was down 0.01% at 38,333.52 points. So far this year, the index has risen 6.29%.
The rupee has risen 1.1% against the greenback in the year so far, while foreign investors bought $10.52 billion in Indian equities and $2.76 billion in the debt market during the period.
Asian currencies were trading lower. Japanese yen was down 0.25%, South Korean won 0.19%, Indonesian rupiah 0.18%, Taiwan dollar 0.13%, Philippines peso 0.05%, Singapore dollar 0.05%. However, China Offshore was up 0.06%.
The dollar index, which measures the greenback’s strength against a basket of major currencies, was at 97.188, down 0.04% from its previous close of 97.188.
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