Bond yields jump on govt borrowing plan
Government bond yields fell sharply on Wednesday after Reserve Bank of India announced unscheduled bond auctions amounting to Rs 25,000 cr in the next eight days.
By ET Online |
NEW DELHI: Government bond yields fell sharply on Wednesday after Reserve Bank of India announced unscheduled bond auctions amounting to Rs 25,000 cr in the next eight days.
The yield on the 10-year bond was around 5.71% in the morning following the announcement. "It is very rare that the government comes out with an out of term borrowing programme since the borrowing schedule is already fixed. The last time such an event happened was a couple of years ago" said the head of a primary dealership firm.
The government has announced the sale (re-issue) of; (i) "7.59 percent Government Stock 2016" for a notified amount of Rs.7,000 crore (nominal) (ii) "6.30 percent Government Stock 2023" for a notified amount of Rs.4,000 crore (nominal) and (iii) "7.50 percent Government Stock 2034" for a notified amount of Rs. 4,000 crore (nominal) through price based auctions using multiple price method.
In another announcement the government has announced the sale (reissue) of securities; "7.59 per cent Government Stock 2016" for a notified amount of Rs. 7,000 crore (nominal), "6.30% Government Stock 2023" for a notified amount of Rs.4000 crore (nominal) and "7.50 per cent Government Stock 2034" for a notified amount of Rs 4,000 crore (nominal) respectively through auctions to be held on January 9, 2009. The underwriting auctions for the captioned securities will be conducted on January 7, 2009.
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