The benchmark 10-year bond yield fell by 9 basis points to 6.75% during the session

India's benchmark 10-year bond yields dropped to their lowest in 20 months on Thursday after the Federal Reserve - the US central bank - signalled possible interest rate cuts later this year, while buying from state-run banks also aided.

The benchmark 10-year bond yield was at 6.75 per cent, as of 9:15 am, its lowest level since October 17, 2017, and down 9 basis points from its previous close.

The Fed on Wednesday said it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month, as it took stock of rising trade tensions and growing concerns about weak inflation.