Bond yields eased off as cash rates retreated from the day's highs. Earlier in the session, bond yields had risen substantially on expectations cash rates could rise above the central bank's emergency funding rate of 10.25%, thereby highlighting the mounting worries over liquidity situations after RBI's additional tightening measures unveiled on July 23. On the global front, U.S. Treasuries prices edged up on Friday in light trading, with investors reluctant to take on large positions ahead of a Federal Reserve meeting next week, which will be scrutinized for signs over when the U.S. central bank is likely to reduce its bond purchase programme. Meanwhile, Brent futures were little changed above $107 a barrel on Monday as concerns surrounding demand growth were offset by a weak dollar and fears about supply disruptions.
Back home, the yields on 10-year 7.16% - 2023 bonds were trading 3 basis points lower at 8.13% from its previous close of 8.16% on Friday.
The benchmark five-year interest rate swaps rose 6 basis points lower to 8.22% from its previous close of 8.28% on Friday.
The Government of India have announced the sale (re-issue) of '1.44% Inflation Indexed Government Stock-2023' for a notified amount of Rs 1,000 crore through price based auction on July 29, 2013 (Monday). Up to 20% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.
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