MUMBAI: Indian government bond yields edged down in early moring trades on Thursday ahead of a 120 billion rupees ($2.25 billion) debt buyback by the central bank.
At 9:20 a.m. (0350 GMT), the benchmark 10-year bond yield was at 8.46 percent, down 2 basis point from Wednesday's close.
The Reserve Bank of India will buy back 7.49 percent 2017 bonds, 7.83 percent 2018 bonds, 7.80 percent 2021 bonds and 8.08 percent 2022 bonds through open market operations later in the day.
Concerns over likely unscheduled bond supply by the government will prevent a sharper rally in prices, traders said.
Dealers expect the government could borrow up to 300 billion rupees more, including the 150 billion sale on Friday, in the remaining part of the fiscal year to end-March.
The RBI said on Wednesday it has decided to extend period of short sale in government securities from existing five days to a maximum of three months, effective Feb 1.
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