Bond St Unimpressed

The bond market gave a thumbs down to the Monetary and Credit Policy for 2003-04. Yields of government securities moved northwards as prices tumbled in a volatile market, which came under selling pressure.

Yields on gilts across all maturities edged up about 10 basis points after the announcement of the credit policy, but value buying led to a drop in yields by around five basis points.

Yields in the corporate bond market also went up 10 basis points immediately after the credit policy announcement, but later dropped six basis points.

However, in the forex market, forward premiums slid on the back of ample liquidity and exporters selling their dollar receivables expecting a stronger rupee.

 

The six-month forward premium closed at 1.96 per cent, against yesterday's close of 2.15 per cent, but the spot rupee finished flat at 47.38/3850.

Dealers said the market had already factored in the bank rate cut.