Government Securities (G-Secs) saw a mild rally, with the yield of the benchmark 10-year paper closing below the crucial 7 per cent level on Friday, on expectation the retail inflation would ease below the monetary policy committee’s 6 per cent upper tolerance level and higher-than-expected cut-off price at the weekly G-Sec auction.
The yield of the 10-year benchmark (7.26 per cent 2033 G-Sec) thawed about 3 basis points to close at 6.9938 per cent (previous close: 7.0234 per cent). Price of this security rose about 21 paise to close at ₹101.84 (₹101.6325).
Post-market hours, the MoSPI announced that consumer price index (CPI) inflation in April 2023 had eased sharply to 4.7 per cent.
With this key inflation gauge dipping below the RBI’s upper tolerance limit of 6 per cent for the first time in 14 months, market experts expect the MPC to continue status quo on the policy repo rate. This, in turn, can buoy the bond market further.
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