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Bond yields jump on unscheduled debt sale announcement

27 Dec 2011 Evaluate

Bond yields shot up on Tuesday after the government surprisingly announced a $2.84 billion unscheduled debt sale on December 30, 2011.

The yields on 10-year benchmark 8.79% - 2021 bonds were trading at 8.52% from its previous close on Monday.

The benchmark five-year interest rate swaps was trading unchanged at 7.05% from its previous close of 7.01%.

The Reserve Bank of India has announced the auction of 91-day and 364-day Government of India Treasury Bills for notified amount of Rs 4,000 crore each. The auction will be conducted on December 28, 2011 using 'Multiple Price Auction' method.

The Government of India have announced the sale (re-issue) of (i) “7.99 percent Government Stock 2017” for a notified amount of Rs 3,000 crore (nominal) through price based auction, (ii) “9.15 percent Government Stock 2024” for a notified amount of Rs 6,000 crore (nominal) through price based auction (iii) “8.28 percent Government Stock 2027” for a notified amount of Rs 3,000 crore (nominal) through price based auction and (iv) “8.83 percent Government Stock 2041” for a notified amount of Rs 3,000 crore (nominal) through price  based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on December 30, 2011 (Friday).

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