India’s 10-year bonds gained for a third day, the longest winning streak in more than two months, amid expectations that a report next week will show moderation in inflation.
The yield on the benchmark 10-year notes dropped to a three-week low on speculation that the RBI will temper the pace of interest-rate increases, after raising borrowing costs four times this year.
The yield on the 7.80% note due May 2020 dropped five basis points to 7.89% as of 11:50 a.m. in Mumbai, according to the central bank’s trading system. The price rose by 33 paise per Rs100 face value, to Rs99.40.
The RBI may raise its repurchase rate (repo rate), at which it lends to banks, by 25 basis points to 6% at its policy review on Sept. 16.