Weekly govt bond auction sails through; Nov rupee's worst month since July

The govt's weekly bond auction saw strong demand with yields aligning to expectations, while the rupee recorded its weakest month since July amid dollar demand and cautious market sentiment

The government sold ₹32,000 crore worth of bonds at the weekly auction on Friday. The cutoff yield on the 7-year bond was set at 6.43 per cent, reflecting strong demand, said dealers.

 

“The key change from the last auction (when the 7-year paper got cancelled) to this auction is demand has improved. This time, yields aligned with market expectations. Sentiment shifted after the Reserve Bank of India (RBI) governor suggested a rate cut was on the cards, leading markets to anticipate lower rates ahead. That expectation helped boost demand,” said a dealer with a private bank.

 

The RBI had cancelled