Bond yields soar after standstill stance of RBI in mid-quarterly policy review

18 Jun 2012 Evaluate

Bond yields dipped amidst the growing caution ahead of the Reserve Bank of India’s (RBI) mid-quarterly policy review, to be released later in the day. The consensus view is that central bank will bring down the key short-term lending rate or repo rate by at least 0.25 percentage points to 7.75 per cent, and may even lower the cash reserves ratio (CRR) by up to 1 percentage point.

On the global front, benchmark US Treasury bonds dropped in Asia on Monday after pro-bailout parties won Greek elections, a step seen as key in holding the euro zone together. Meanwhile, Brent oil hit a one-week high above $99 a barrel on Monday after a victory for Greece's pro-bailout political parties revived risk appetite.

Back home, the yields on 10-year benchmark 8.79% - 2021 were trading 2 basis points lower at 8.32% from its previous close of 8.34% on Friday.

The benchmark five-year interest rate swaps fell 1 basis point to 7.15% from its previous close of 7.16%.

Meanwhile, six state governments announced an Auction of State Development Loans 2022 for Rs 4450.00 crore on June 19, 2012.

Additionally, five State Governments, namely, Andhra Pradesh, Jharkhand, Haryana, Tamil Nadu and Uttar Pradesh announced Auction of State Development Loans 2022 for Rs 3950.00 crore on June 19, 2012.

Post RBI’s Mid-Quarterly Policy Review:

The yields on 10-year benchmark 8.79% - 2021 rose to a session high of 8.47%, marking a three-week high after RBI stunning the markets left interest rates and the CRR untouched.

However, the announcement that RBI would continue to inject liquidity conditions via further OMOs could cap further falls in bond prices. Meanwhile, RBI to further augment liquidity and encourage banks to increase credit flow to the export sector, increased the limit of export credit refinance from 15% of outstanding export credit of banks to 50% in its mid-quarter monetary policy review. A move, which will potentially release additionally liquidity of over Rs 300 billion, equivalent to about 50 basis points reduction in the CRR.

Furthering the over two-year-old anti-inflationary posture, RBI, shockingly this time around also preferred to sacrifice growth over inflation and left the key CRR and policy repo rate untouched at 4.75% and 8% respectively

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.