Gilts rally on eve of RBI policy review; call rates retreat

The government bond (G-Sec) prices rallied following strong demand from banks and corporates as well steady build-up positions by market participants ahead of the RBI'S credit policy.
Meanwhile, the call money rates dropped at the overnight call money market due to lack of demand from borrowing banks amid ample liquidity conditions in the
banking system.
The 8.40 per cent government security maturing in 2024 rose to Rs 104.43 from Rs 104.32 previously, while its yield declined to 7.72 per cent from 7.74 per cent.
The 8.60 per cent government security maturing in 2028 firmed up to Rs 107.03 from Rs 106.9575, yield softened to 7.74 per cent compared to 7.75 per cent.

The 8.27 per cent government security maturing in 2020 moved up to Rs 102.28 from Rs 102.17, while yield fell to 7.72 per cent against 7.75 per cent.

The 8.15 per cent government security maturing in 2026 edged higher to Rs 103.31 from Rs 103.20, while yield drifted to 7.71 per cent from 7.73 per cent.
The 8.83 per cent government security maturing in 2023 the 8.28 per cent government security maturing in 2027 and the 9.20 per cent government security maturing in 2030 also quoted substantially higher at Rs 106.45, Rs 103.90 and Rs 112.04, respectively.
The interbank call rates opened lower at 7.50 per cent against 9.00 per cent last Tuesday and moved in a narrow range before ending at 6.25 per cent.

Meanwhile, the Reserve Bank of India (RBI), under the Liquidity Adjustment Facility (LAF), purchased securities worth Rs 12.67 billion in 8-bids at the 1-day repo auction at a fixed rate of 7.50 per cent today.