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Last Updated : Jul 17, 2019 11:14 AM IST | Source: Moneycontrol.com

10-year bond yield slips to lowest level since demonetisation

Deutsche Bank estimates that the benchmark bond yield will fall to 6 percent by the end of 2019, and 5.75 percent by the end of 2020

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The government's 10-year bond yields fell to their lowest level since demonetisation, helped by an increase in demand and prospects of a rate cut by the RBI.

The yield on 10-year benchmark bonds fell to 6.33 percent on July 16, the lowest since December 2016 after the government banned high-value currency notes. The five-year bond yield was at 6.35 percent.

The benchmark bonds are performing better than corporate bonds. Corporate bonds had a weighted average yield of 8.28 percent in June.

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Brokerages have a positive outlook on Indian bond yields. Singapore's DBS Group observed domestic catalysts are positive in the short-term, which could support bonds.

Deutsche Bank estimates that the benchmark bond yield will fall to 6 percent by the end of 2019, and 5.75 percent by the end of 2020.

Deutsche Bank has also predicted that yields from sovereign bonds will decline to their lowest since 2009.

Finance Minister Nirmala Sitharaman had announced the government's intention to issue overseas sovereign bonds during the Budget speech on July 5.

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First Published on Jul 17, 2019 11:14 am
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