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Bonds fall after RBI deputy governor warns banks of high interest rate risk

The statement was seen by traders as hawkish and as a message asking them to bring down their bond holdings

Reuters  |  MUMBAI 

bonds, mutual funds, dividends, NPAs, income, investment, savings, finance, PF

yields spiked on Tuesday morning after a of the Reserve of (RBI) said public sector lenders face risks of high from their large holdings.

The statement was seen by traders as hawkish and as a message asking them to bring down their holdings.

"The size of the banking sector's balance-sheet exposure to G-Secs, and hence its risk, is high in an absolute sense, and is relatively elevated, when measured in proportion to total assets, for public sector banks relative to private banks," said late on Monday.

"The high exposure of banks from their G-Sec portfolios is attributable to not only the size of their holdings, but also to the increasing maturity of primary issuance," he added.

By 0440 GMT, the benchmark 10-year yield was at 7.54 percent, up 10 basis points on the day.

It touched a high of 7.56 percent earlier in the session.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, January 16 2018. 13:41 IST
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