Bond yields at 2013 high

Written by Agencies | Mumbai | Updated: Jul 24 2013, 08:39am hrs
Ten-year bonds fell, pushing the yield to the highest level this year, on speculation RBI will tighten monetary policy further to arrest a slide in the rupee.

The Reserve Bank of India raised the marginal standing facility and the bank rate to 10.25% from 8.25% last week, keeping the key repurchase rate unchanged after cutting it in May. Rupee had fell most in two weeks on Monday and has lost 8% in 2013.

The yield on the 7.16% bonds due May 2023 rose nine basis points to 8.18% in Mumbai, according to RBIs trading system. Thats the highest for a benchmark 10-year note since December 12. The rate surged 41 basis points last week, the most for a 10-year government security since December 2009, data compiled by Bloomberg show.

Rupee falls 4 paise

The rupee failed to hold on to initial gains, which came as the markets cheered RBI's fresh steps to curb gold imports, and fell four paise to end at a week's low of 59.76 against the dollar on sustained demand from importers and a rise in the US currency overseas.