Bond yields extending its declining streak were trading sharply lower on Wednesday after brent crude hits a 4-year low and ahead of a sale of Rs 10,000 crore of bonds through open market operations on Wednesday.
On an assessment of current and evolving liquidity conditions, Reserve Bank has decided to conduct sale of government securities under Open Market Operations for an aggregate amount of Rs 10,000 crore on November 5, 2014, including (i) 8.07 % GS 2017 with a maturity date of January 15, 2017, (ii) 8.79 % GS 2021 with a maturity date of November 8, 2021, (iii) 8.08% GS 2022 with a maturity date of August 2, 2022 and lastly (iv) 8.28% GS 2027 with maturity date of September 21, 2027.
On the global front, U.S. Treasury debt yields slipped on Tuesday as a gloomier outlook on the European economy from the region's ruling body raised the appeal of higher-yielding U.S. government bonds. Meanwhile, brent crude dropped towards $82 a barrel on Wednesday, stretching losses into a fifth session, as weak economic data from top energy consumer China stoked worries about demand in a market that is already battling a deepening global supply glut.
Back home, the yields on new benchmark 8.40%-2024 bonds was trading 5 basis points lower at 8.21% from its previous close of 8.26% on Monday.
The benchmark five-year interest rate swaps were trading 7 basis points lower at 7.35% from its previous close of 7.42% on Monday.
The Reserve Bank of India has announced the auction of 91 and 182 day Government of India Treasury Bills for notified amount of Rs 9000 crore and Rs 6000 crore respectively. The auction will be conducted on November 05, 2014 using 'Multiple Price Auction' method.
The Reserve Bank of India will conduct 2 day reverse repo auction at variable rate on November 5, 2014, Wednesday for a notified amount of Rs 60,000 crore. The auction will be conducted between 4.00 p.m. and 4.30 p.m. as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.
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