10-year-bond yields rise to 7.9%

MUMBAI: Yields on ten year bonds rose to 7.90% after opening at 7.88 percent in the morning as many in the bond market expect the RBI to pause or at best do a token rate cut of 25 basis points. The waning expectations is after the Reserve Bank flagged off concerns on suppressed inflation and historically high current account deficit, that is s constraint on series of rate cuts which the market favours.

From expecting a 50 basis points rate cut last month on lower than expected WPI(wholesale prices number) , economists and traders are now expecting a 25 basis point cut in repo rate, the rate at which the RBI lends to banks. Some of them even expect the Governor to skip a rate cut today after the hawkish macroeconomic and monetary development report for the third quarter of FY13.

The Third quarter monetary policy is due at 11 a.m.