Mumbai: The sovereign bond prices and rupee declined after the Reserve Bank of India (RBI) on Friday cut key lending rates by 25 basis points. The rupee after fluctuating between a high of 70.78 and a low of 71.03, finally settled at 70.88, down 1 paise over its previous close.
The 10 year G Sec bond yield rose 0.073 basis points to close at 6.68. There is an inverse relationship between bond prices and yield. Currently the spread between the repo rate and the 10 year G sec at over 153 basis points. The interest rate cut by RBI has been offset by the rise in bond yield.
