Indian 10-year bond yields betray 7 pct mark first time in six years on RBI easing hopes

The Indian 10-year bond yields fell below 7 percent mark Monday for the first time in nearly six years as investors speculate that the Reserve Bank of India (RBI) will lower its key interest rate in its October 4 monetary policy decision.

The yield on the benchmark 10-year bonds, which moves inversely to its price, fell nearly 3-1/2 basis points to 6.933 percent, the super-long 30-year Treasury yield also dipped 3-1/2 basis points to 7.139 percent and the short-term 2-year note yield slid 3 basis points to 6.708 percent by 07:00 GMT.

According to Reuters, India's monetary policy committee will decide the policy interest rate at the scheduled October 4 review, and the newly-appointed external members to the panel would be at an arm’s length from the government.

The MPC will take over the policy interest rate-setting responsibility from the RBI governor. The RBI has reduced the repurchase rate by a total 150 basis points since January 2015 to 6.5 percent, they added.

Meanwhile, the Sensex fell 0.74 percent or 210.95 points to 28,457 and Nifty-50 futures traded 0.16 percent lower or 14.40 points at 8,818.75 by 07:20 GMT.