MUMBAI (Reuters) – Indian bonds rose to over 8-month highs as rate hike fears faded after the central bank promised to keep buying government bonds to infuse liquidity, and also mentioned the probability of changing its rate stance if inflation risks do not mature.
The 10-year benchmark bond yield fell to as low as 7.38 percent, its lowest since April 11 and compared with its previous close of 7.44 percent.
The Indian rupee was weaker at 70.89 to the dollar tracking Asian peers, compared with 70.46 on Wednesday. Most Asian currencies fell on concerns over slowing global growth and a lack of resolution in the China-U.S. trade war.
India’s central bank kept interest rates unchanged on Wednesday, in a decision that was widely expected as inflation has eased significantly, while it took steps to persuade banks to lend more in order to support an economy that has lost some momentum.
Reporting by Suvashree Dey Choudhury; Editing by Sunil Nair