Bond yields edged lower as traders raised stake on the possibility of the RBI conducting open market operations to help tide over debt supplies amid tight liquidity conditions. Further, growing hopes of an interest rate cut after the central bank governor said that it was likely to begin easing monetary policy to address concerns about economic growth also aided bond buying. On the global front, US bond markets remained closed on Monday.
The yields on 10-year benchmark 8.79% - 2021 bonds were trading lower at 8.36% from its previous close.
The benchmark five-year interest rate swaps inched lower by 2 basis points at 7.01% from its previous close on Monday.
The Government of India has announced the sale of three dated securities for Rs 14,000 crore on January 6, 2012. The government have announced the sale (re-issue) of (i) “7.83 percent Government Stock 2018” for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) “8.79 percent Government Stock 2021” for a notified amount of Rs 7,000 crore (nominal) through price based auction and (iii) “8.28 percent Government Stock 2032” 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, Fort, Mumbai on January 06, 2012 (Friday).
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