Mumbai: India’s benchmark gold water Tracking the global trend of tighter yields, the yield on the 10-year papers crossed the psychologically important 6.50% mark on Tuesday. This is the first time since April 2020 that the benchmark has crossed that mark, indicating that interest rates in India may rise in the coming months.
bond dealer said that there were signs of a hardening of rates from December 24, when 30% of the government’s total borrowing for the week, which was pegged at Rs 24,000 crore, as investors wanted a higher yield, while reserve Bank of India (RBI) was not ready to accept it. During applies to auctions on 31st December, reserve Bank of India Auctions worth Rs 17,000 crore were canceled or 71% of the Rs 24,000 crore that were planned. This, again, was for the same reason.
A debt fund manager said, “There has been some pressure in Indian fixed income yields over the past few weeks, tracking global yield movements and rising crude prices.
According to the fund manager, the rising supply of state government bonds since mid-December has further complicated the situation in the absence of any open market purchases by the RBI or Operation Twist, which has been routinely conducted during the first half of the financial year. was organized from In contrast, the central bank is selling small amounts of central government papers every week in the secondary market.
These factors, coupled with sluggish demand from the banking sector on account of large credit growth during Q3, tilted the demand-supply balance to the supply side. “As a result, even after RBI’s indication of returns transfer or partially canceling the primary auction, proved less effective.”
In the government bond market, where the 10-year benchmark gilt yield crossed the 6.50% mark for the first time since April 13, 2020, the yield on state development loans also crossed 7.10% on Tuesday. Yields on central and state government bonds were at their peak around the same time.
bond dealer said that there were signs of a hardening of rates from December 24, when 30% of the government’s total borrowing for the week, which was pegged at Rs 24,000 crore, as investors wanted a higher yield, while reserve Bank of India (RBI) was not ready to accept it. During applies to auctions on 31st December, reserve Bank of India Auctions worth Rs 17,000 crore were canceled or 71% of the Rs 24,000 crore that were planned. This, again, was for the same reason.
A debt fund manager said, “There has been some pressure in Indian fixed income yields over the past few weeks, tracking global yield movements and rising crude prices.
According to the fund manager, the rising supply of state government bonds since mid-December has further complicated the situation in the absence of any open market purchases by the RBI or Operation Twist, which has been routinely conducted during the first half of the financial year. was organized from In contrast, the central bank is selling small amounts of central government papers every week in the secondary market.
These factors, coupled with sluggish demand from the banking sector on account of large credit growth during Q3, tilted the demand-supply balance to the supply side. “As a result, even after RBI’s indication of returns transfer or partially canceling the primary auction, proved less effective.”
In the government bond market, where the 10-year benchmark gilt yield crossed the 6.50% mark for the first time since April 13, 2020, the yield on state development loans also crossed 7.10% on Tuesday. Yields on central and state government bonds were at their peak around the same time.
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