By Anoop Agrawal Nov. 24 (Bloomberg) -- India’s bonds gained on speculation the central bank will maintain interest rates at record lows to support an economic recovery this year. The yield on the benchmark 10-year note declined to near the lowest level in seven weeks before a government report on quarterly economic growth on Nov. 30. The Reserve Bank of India last month maintained the reverse repurchase rate at 3.25 percent and the repurchase rate at 4.75 percent, and ordered lenders to keep more cash in government bonds, raising the statutory liquidity ratio to 25 percent from 24 percent. “The economic situation needs the present monetary conditions before we can say growth is on a recovery path,” S. Srikumar, chief of fixed-income trading at state-owned Corporation Bank in Mumbai. “Investors are pricing in monetary conditions that are favorable for bonds.” The yield on the 6.9 percent note due July 2019 fell two basis points to 7.20 percent as of 10:37 a.m. in Mumbai, according to the central bank’s trading system. The price rose 0.16, or 16 paise per 100 rupee face amount, to 97.96. The yield will decline to 7.1 percent over the next two weeks, Srikumar predicted. India’s gross domestic product expanded 6.1 percent in the three months to June 30 from a year earlier, after a 5.8 percent gain in the previous quarter, official figures show. Figures for the July-September period are due on Nov. 30. The cost of five-year interest-rate swaps, or derivative contracts used to guard against fluctuations in borrowing costs, fell. The rate, a fixed payment made to receive floating rates, fell to 6.55 percent from 6.59 percent yesterday. To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net

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