Mumbai, May 22: The bond markets remained largely unperturbed by the Employees Provident Fund (EPF) sub-committee’s proposal that the interest rate on EPF be lowered to between 8-9 per cent from the present 9 per cent.
Observers said the market would take stock of the development only after a cut is announced.
“The market is confused as the committee has suggested a wide range of 8-9 per cent. The expectation is centered around 8.5 per cent. Only after the government announces its decision, will the market react, an analyst with one of the leading private banks said.
He added that an upward bias still persists in the bond market characterised by plenty of liquidity and no supply of paper in the near future.
While interest rates on small savings and public provident funds have been brought down, the employees provident fund rate has remained the same.
Earlier in the day, yield on the benchmark 10-year security was prevailing at 5.83 per cent against the initial level of 5.85 per cent.