While not exactly announcing an OMO calendar for secondary-market bond purchases, the OMO size has been doubled to Rs 20,000 crore in each operation
Central bank had planned to buy up to Rs 100 billion ($1.35 billion) worth of six-year to 11-year papers at an open market operation.
As challenges mount, the central bank will need to strike a fine balance between managing the rupee, domestic liquidity and fiscal financing
This is the third straight auction of 10-year bonds that has devolved, leaving the market perplexed
The "risk-free" yield on 10-yr g-sec is a threshold for investors. If its softens, investors get into riskier assets like equities. If it hardens, they settle for attractive risk-free rate on offer
Rupee closes at 72.87 a dollar, up 1.03% from previous close of 73.62. The 10-year bond yields shed 18 bps to close at 5.942 per cent from previous close of 6.117 per cent
Avoid venturing into funds whose average maturity exceeds three-four years
The cut-off yield in the auction of this bond came at 5.96 per cent, against its coupon of 5.77 per cent. The bond was launched just last week
You can invest as much as you like in these bonds, but they are subject to rate changes
A steep yield curve has been followed by a bull run in equities on a couple of occasions in the past
Currency dealers say the Reserve Bank of India (RBI) intervened in the currency markets, and may have even bought some bonds anonymously from the secondary markets.
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