Given the plan to borrow an additional Rs 4.2 trillion from the market, yields will show a tendency to move up. But, the huge liquidity in the system kept the rise in check, bond dealers said.
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The government had surprised everyone with a revised borrowing programme of Rs 12 trillion, against Rs 7.88 trillion originally planned
Traders said yields could rise further in the absence of any immediate support from the central bank in the form of an open market calendar
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The excess borrowing will, however, ease the pressure on the RBI's liquidity operation as banks will absorb the excess G-Secs
The 10-year bond yields closed at 6.38 per cent
Reserve Bank of India (RBI) Governor Shaktikanta Das told Bloomberg in an interview on Tuesday that the central bank was ready to do whatever was needed to address a slowdown.
There is fear that the RBI has no wiggle room for further rate cuts. Without rate support, yields will rise. This translates into a fall in prices for bonds
The yield opened at 6.15 per cent mark and moved up further to hover around 6.68 per cent level, according to Clearing Corporation of India Ltd ( CCIL) data
How fiscal pressures on state budgets are more pro-cyclical and weak imports push up bond yields
Effectiveness of the policy needs to be questioned
Spread between G-secs, equivalent maturity pvt bonds has widened
The domestic 10-year bond closed at 6.68%, from its Monday's close of 6.58%
As risks to the outlook increase, investors are scooping up longer-dated securities on expectations that interest rates will continue to fall
India's benchmark 10-year bond yield fell as much as 11 bps to 6.42% on FM Sitharaman's comments
Subhash Chandra Garg's transfer to the power ministry, from being economic affairs secretary, also fuelled the speculation, even as there was no official announcement on this
Brexit will keep driving investors into the safest assets, meaning demand will remain high for negative-yielding debt
US Federal Reserve said it was ready to battle growing global and domestic economic risks with interest rate cuts
The yield on 10-year rupee sovereign debt fell as much as 9 basis points to 6.94%