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MARKET EYE-India bond yields fall; March rate cut door open
January 29, 2013 / 8:33 AM / in 5 years

MARKET EYE-India bond yields fall; March rate cut door open

* Indian government bond yields fall after initial tepid
response to RBI repo, CRR cuts as dealers say detailed reading
shows policy has reduced hawkish inflation talk; does not rule
out further near-term rate cuts.
* The benchmark 10-year bond yield falls as much
as 5 bps on day, currently at 7.83 pct, down 3 bps.
* "Apart from the OMO disappointment, there is not much negative
as the chance of a repo cut in March remains open," says senior
foreign bank dealer.
* Dealers say yields may fall below 7.80 pct in run-up to
Friday's auction.
* "We expect 10-year bond yields to remain range-bound in
February and move lower towards the March policy in expectation
of a rate cut in the March quarterly review," said Arvind Chari,
senior fund manager at Quantum Asset Management.
* "We also expect inflation readings in February and March to be
lower than current readings further supporting the rate cut in
March/April," he said.

 (subhadip.sircar@thomsonreuters.com/;
subhadip.sircar.thomsonreuters.com@reuters.net)

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