Bond yields edged lower on speculation government borrowings will climb to a record as Finance Minister Arun Jaitley presents Budget 15-16 on February 28. Street may announce Rs 6.4 trillion ($103 billion) of gross debt sale, which compares with an estimated Rs 6 trillion for the current year.
On the global front, U.S. Treasuries prices fell on Thursday after an increase in core U.S. consumer prices in January pointed to marginally less dovish Federal Reserve policy and as an auction of seven-year notes met with soft demand. Meanwhile, brent and US crude futures fell to near six year lows, down 60% since June, a blow from oil exporters Russia, Saudi Arabia and Malaysia.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 7.73% from its previous close of 7.74% on Thursday.
The benchmark five-year interest rate swaps were trading 1 basis point higher at 6.96% from its previous close of 6.95% on Thursday.
The Reserve Bank of India will conduct 6 day variable rate reverse repo auction for a notified amount of Rs 30,000 crore on February 27, 2015, Friday. 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.