MUMBAI: Bond yields plunged to a three-year low as one-and-a-half years of interest rate cuts by RBI Governor Raghuram Rajan and his liquidity easing measures begin to bear fruit. "A combination of factors have triggered fall in the bond yields in the past two weeks," said Soumyajit Niyogi of India Ratings & Research. "While easing liquidity has contributed the most along with a good monsoon, globally yields are heading lower after Brexit." ''Monetary policy works with a lag and the RBI's 150 bps rate cut since January 2015 is beginning to show in market borrowing costs. "I see borrowing costs come down in the backdrop of the improved liquidity conditions.

Source: Economic Times July 05, 2016 23:03 UTC