RBI's dovish policy helps bonds cut back on Union Budget losses

Bond yields, which shot up significantly after the Union Budget announced a larger-than-expected borrowing, got some relief after the central bank delivered an extremely dovish policy

Bond yields, which shot up significantly after the Union Budget announced a larger-than-expected borrowing for the next financial year, got some relief on Thursday after the central bank delivered an extremely dovish policy without tampering with the reverse repo rate, which was widely expected.

Yields on the 10-year government bond fell 7 bps to close the day at 6.73 per cent. Bond yields have softened in the last two trading sessions after the RBI cancelled the weekly auction that was scheduled for Friday due to the comfortable cash position of the government.

“We found the MPC statements and the comments from the