Benchmark yield retreats after RBI's rate-cut hints

Mumbai: Yield on the 10-year benchmark government security closed at 6.52% Monday, easing four basis points during the day, following Reserve Bank of India governor Sanjay Malhotra's comment that there was scope for an interest-rate cut based on latest data.

The yield had hardened four basis points to 6.56% on Friday after the rupee depreciated past the psychologically significant 89/$1 mark.

"At the last MPC (Monetary Policy Committee) meeting in October, it was communicated clearly that there is room to cut policy rates," Malhotra said in a media interview.


"Since then, the macroeconomic data we have received has not indicated that the room to lower rates has decreased. There is certainly room (to lower rates) but whether the MPC takes a call on that in the coming meeting or not depends on the committee," Malhotra said.

The MPC is set to meet December 3-5. The committee has cut the policy repo rate by 100 basis points to 5.5% in the first half of 2025 but has maintained a pause since August.

Members of India's interest-rate panel also indicated there was scope for future rate cuts as the country's inflation outlook turned more benign, minutes of the October meeting showed.