Yields board the North-bound Exp
The bond markets, which had been building up positions on expectations of a cut in the repo rate, saw yields going up by nine basis points soon after the central bank left key rates unchanged at its quarterly policy review.
By TNN |
MUMBAI: The bond markets, which had been building up positions on expectations of a cut in the repo rate, saw yields going up by nine basis points soon after the central bank left key rates unchanged at its quarterly policy review. The yields on the benchmark 10-year paper, the 7.99% bond maturing in 2017, ended the day at 7.54%, up from Monday’s close of 7.45%.
“The rise was brought about by dealers, who had built up positions expecting a rate-cut adjusting their positions,” said a dealer with a private bank. However, a possible cut in US interest rates by the Fed could result in yields falling on Wednesday.
Meanwhile, the rupee ended the day flat from its previous close, following an unchanged stance on the monetary policy by the central bank on Tuesday. The rupee ended at 39.38/39 against the dollar, unchanged from the previous close.
Traders who had built up long positions on the dollar, had to sell them following the status-quo adopted by the central bank. This took the rupee up to 39.36-levels during the day, but central bank intervention at this point brought the rupee back to the day’s close.
However, much will depend on the outcome of the Federal Open Market Committee (FOMC) meeting scheduled for Tuesday night. A rate cut by the US Federal Reserve could result in further inflows, though market sources feel that this will not have much effect on the local unit as the RBI’s stance indicates that it will mop up any excess foreign funds that flow in. The RBI’s liquidity adjustment facility saw bids of Rs 24,595 crore being placed on the reverse repo auction, all of which was mopped up by the central bank.
Rates on the inter-bank call market ended the day at 7.10% after deals worth Rs 26,174 crore were carried out. The rates had started the day at 7% and rose to the day’s high of 7.25%.
Collateralised borrowing rates ended the day at 6.50% after transactions worth Rs 43,381 crore were carried out. The rates had opened at 6.75% and rose to 7%. Repo rates ended the day at 6.35% after deals worth 26,174 crore were struck.
“The rise was brought about by dealers, who had built up positions expecting a rate-cut adjusting their positions,” said a dealer with a private bank. However, a possible cut in US interest rates by the Fed could result in yields falling on Wednesday.
Meanwhile, the rupee ended the day flat from its previous close, following an unchanged stance on the monetary policy by the central bank on Tuesday. The rupee ended at 39.38/39 against the dollar, unchanged from the previous close.
Traders who had built up long positions on the dollar, had to sell them following the status-quo adopted by the central bank. This took the rupee up to 39.36-levels during the day, but central bank intervention at this point brought the rupee back to the day’s close.
However, much will depend on the outcome of the Federal Open Market Committee (FOMC) meeting scheduled for Tuesday night. A rate cut by the US Federal Reserve could result in further inflows, though market sources feel that this will not have much effect on the local unit as the RBI’s stance indicates that it will mop up any excess foreign funds that flow in. The RBI’s liquidity adjustment facility saw bids of Rs 24,595 crore being placed on the reverse repo auction, all of which was mopped up by the central bank.
Rates on the inter-bank call market ended the day at 7.10% after deals worth Rs 26,174 crore were carried out. The rates had started the day at 7% and rose to the day’s high of 7.25%.
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Collateralised borrowing rates ended the day at 6.50% after transactions worth Rs 43,381 crore were carried out. The rates had opened at 6.75% and rose to 7%. Repo rates ended the day at 6.35% after deals worth 26,174 crore were struck.
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