Mumbai: The 10-year government bond yield fell as much as 11 basis points to hit a fresh eight-month low on Wednesday after the government appointed Shaktikanta Das as a new RBI governor, who is expected to have more dovish views. At 2.44pm, the 10-year bond yield fell to 7.422% from its previous close of 7.528%. Bond yields and prices move in opposite directions.

“We think his appointment has equally (if not more) important implications for monetary policy itself. We expect the new MPC to have more dovish leanings and think a window for a rate cut has opened in H1-2019", Priyanka Kishore, Head of India and Southeast Asia economics at Oxford Economics, wrote in a note.

Announcement of Shaktikanta Das as RBI governor came a day after Urjit Patel resigned amid differences between government on varioius issues like the independence of the RBI, norms for Prompt Correction Action (PCA) for PSU banks and dividends from the RBI to the government,among others .

Indian rupee weakened amid concerns on independence of RBI given newly appointed governer’s close ties with the government. Rupee was trading at 72.01 a dollar, down 0.2% from its previous close.

“Further clarity will emerge only once we know the new Governor’s stance on the key regulatory and capital management issues that have become the bone of contention between the RBI and government", Kishore added.

Analysts await consumer price inflation and index of industrial data due after 5.30pm on Wednesday. CPI for November is expected at 2.53%, according to a Bloomberg poll, against 3.31% a month ago. IIP estimated at 6% for October against 4.5% last month.