Bond yields were trading lower on the back of replacement demand after traders bid to sell bonds to the central bank at its open market bond purchase auction. However, the auction results are due to be released later in the day.
Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 8,000 crore on January 4, 2013 through multi-security auction using the multiple price method.
On the global front, benchmark US Treasuries yields hit fresh eight-month highs in Asian trade on Friday, after signs of doubt within the Federal Reserve over its bond-buying program pressured US debt. Meanwhile, Brent crude dipped sub $112 a barrel on Friday as growing doubts within the US Federal Reserve about the side effects of its stimulus programme and the prospect of more budget battles in Washington sapped investor’s risk appetite.
Closer home, the yields on 10-year 8.79% - 2021 were trading lower by 3 basis points at 7.94% from its previous close of 7.97% on Thursday.
The benchmark five-year interest rates were trading 3 basis points lower at 7.15% from its previous close of 7.18% on Thursday.
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