The yield on the widely traded 7.26 percent 2032 Government Security (G-Sec) rose about 3 basis points on Wednesday as the monetary policy stance was more aggressive than expected.
This paper closed with a yield of 7.3435 percent against the previous close of 7.3102 percent, and its price decreased around 23 paise to close at ₹99.43 against the previous close of ₹99.655.
Bond prices and yields are inversely correlated and move in opposite directions.
HDFC Bank, in a report, noted that the monetary policy stance was more aggressive than most market participants had expected, as the RBI acknowledged that they are still far from achieving their lasting disinflation target. ·
“Going forward, the central bank is likely to become more data dependent, and this does not rule out another rate hike in the next policy,” according to the report.
Bank economists expect the 10-year paper to trade between 7.30 and 7.35 percent in the short term.
