The yield on the 10-year bond came within touching distance of six quarter mark as bond dealers worried about possible lack of rate cuts from RBI going by the tone of the minutes of the Monetary Policy Committee (MPC). The lack of any support from Reserve Bank of India (RBI) in the form of a bond purchase also worried banks and bond buyers.
In an interview with CNBC-TV18, Neeraj Gambhir, head-treasury at Axis Bank spoke at length about where these are headed and whether the RBI by just one announcement can quieten the market.
Gambhir said that bond yield surge is a cause for concern. He further said that we are seeing a large amount of supply that the market has to deal with.
According to him, pressure on bonds may continue for some time and a lot will depend on what RBI’s move on bond prices is, he added.
The Reserve Bank of India not intervening so far indicates they are comfortable with current yields, added Gambhir.