Yields partially bounce back on profit-booking

Government bond yields reversed some early gains by the end of the trade on Friday as mutual funds and private banks sold bonds at a profit after the initial fall in yields, said dealers.

- ANJALI KUMARI

The yield on the benchmark 10-year government bond fell up to 6.45 per cent during the day after the rate setting panel of the central bank cut the policy repo rate by 25 bps to 5.5 per cent. However, it settled at 6.49 per cent, against the previous close of 6.51per cent.

Bond yields also declined following the RBI’s announcement of %1 trillion in OMO purchases this month.

However, some of the decline was reversed after the RBI Governor clarified that OMOs are meant to support liquidity, not to directly control yields.