Mumbai: The yield on the 10-year government bond fell 5 basis points on Friday after Reserve Bank of India governor Shaktikanta Das said there was room for further interest rate cuts.

The yield on the 10-year bond was at 6.587% compared with its previous close of 6.64%.

“Today, when we see that the price stability is maintained and inflation is much below 4% and is expected to be so in the next 12 months horizon, there’s a room for rate cut especially when growth has slowed down. Within this policy framework the MPC will consider these aspects as well as several other factors including the assessment of growth and inflation projections of our research teams," said governor Das, while speaking at the Bloomberg India Economic Forum in Mumbai on Thursday.

Meanwhile, the Indian rupee opened higher on Friday tracking gains in other Asian currencies. At 9.10 am, the rupee traded at 71.17 a dollar, up 0.22% from its Thursday's close of 71.33. The domestic currency opened at 71.21 a dollar.

Traders are awaiting the 37th meeting of federal indirect tax body, the Goods and Services Tax (GST) Council. Finance Minister Nirmala Sitharaman will likely announce more measures to revive economic growth and boost job creation on Friday in continuation of the steps announced in recent weeks as she tries to steer Asia’s third largest economy into a faster growth trajectory.

Also watch: Mint Explainer | RBI's Rate Cut Indications

In pre-trade, the benchmark equity index Sensex was up 0.42% at 36,243.98 points. So far this year, the index has risen 1.37%.

In the year so far, the rupee has weakened 2.8%, while foreign investors have bought nearly $6.46 billion in Indian equities and $4.31 billion in debt.

Other Asian currencies also traded higher. South Korean won was up 0.37%, China Offshore 0.32%, Malaysian ringgit 0.3%, Singapore dollar 0.2%, China renminbi 0.18%, Thai Baht 0.15%, Japanese yen 0.09%. However, Indonesian rupiah was down 0.08%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.244, down 0.03% from its previous close of 98.272.