Indian bond yields edge down on easy rate view

* OIS rates ease to one-month lows

* Tapering supplies support demand

* Govt to sell $1.9 bln of bonds on Friday (Updates to mid-morning)

MUMBAI, Nov 5 (Reuters) - Indian bond yields eased on Thursday as recent statements by policymakers suggested that the economy may not be out of the woods yet, prompting traders to unwind positions that priced early rate hikes.

At 11:26 a.m. (0557 GMT), the yield on the 10-year benchmark bond was at 7.26 percent, after falling to 7.25 percent in early deals, below Wednesday's 7.28 percent close.

Volumes were a moderate 27.65 billion rupees ($587 million) on the central bank's trading platform.

Benchmark five-year swap rate (OIS) fell to 6.60/64 percent, a level last tested on Sept. 29, and sharply below Wednesday's close of 6.67/71.

"Over the last few days policymakers have been less hawkish than earlier perceived, so the guys who had paid OIS (overnight indexed swaps) are losing conviction and yields there are coming down," said a senior trader at a foreign bank.

On Wednesday, deputy chairman of the Planning Commission Montek Singh Ahluwalia said that the country would miss a target of 9 percent annual growth between 2007/08 and 2011/12 as the global slump and the weakest monsoon in four decades hit output.