Indian bond yields have experienced a decline of 12 basis points in the past week, indicating a growing sense of optimism about potential interest rate cuts by the Reserve Bank of India (RBI).

Nomura has predicted a reduction of 25 basis points in the repo rate in December, along with a 50 basis point decrease in the cash reserve ratio (CRR).

As of December 5, the yield on the 10-year benchmark bond, 7.10 percent 2034, was 6.727 percent, down from 6.849 percent on November 28. Similarly, the yield on the 6.79 percent 2034 bond dropped to 6.678 percent from 6.807 percent during the same period.

These developments have occurred in the context of a slowdown in GDP growth, which was 6.7 percent for the September quarter, compared to 8.1 percent a year earlier. This economic deceleration has limited the RBI's ability to maintain current policy rates, leading to discussions about rate and CRR cuts as measures to stimulate growth without exacerbating inflation.