The yield on the benchmark bond eased sharply during the morning trade after the Reserve Bank of India (RBI) kept the repo rate unchanged.
The yield on the 10-year benchmark 7.26 percent 2032 bond were trading at 7.1980 percent, as against 7.2750 percent close on the previous trading session.
Yield on benchmark bond went as low as 7.1469 percent during announcement of monetary policy review.
The Monetary Policy Committee (MPC) on April 6 chose to retain the repo rate at the same level taking into account the turmoil caused by global banking crisis and the contagion risks.
It maintained the 'withdrawal of accommodation' stance highlighting the readiness to act should the situation so warrant.
One basis point is one hundredth of a percentage point. The MPC kept the repo rate, or the rate at which it lends short-term funds to banks, at 6.5 percent.
Srikanth Subramanian, CEO, Kotak Cherry said that the decision to keep repo rates unchanged at 6.5 percent was surprising.
"RBI stated that they will continue monitoring the evolving situation around inflation and banking sector turmoil in developing countries. Although inflation globally and in India have moderated from decadal high levels seen last year, it will be important to see what the inflation numbers come out in the next few months following the surge in crude oil prices seen post announcement of crude production cuts announced by OPEC+ countries," said Subramanian.
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