Bond yields soared to 21 months high level as the rupee slid to a record low despite policy makers' efforts to defend the currency. On the currency front, unconvinced about the efficacy of steps unveiled last week to contain the current account deficit at 3.7 percent of gross domestic product (GDP) during the current fiscal year sharply lower than the record high 4.8 percent in the previous year, Indian rupee fell to a record low of 62.45/$ on Monday and looked poised for further losses.
On the global front, U.S. Treasuries prices slid on Friday, marking the worst week in two months due to persistent fears that the Federal Reserve will pare its bond purchases in September as the US economy showed signs of further improvement. Meanwhile, brent crude prices held steady above $110 a barrel on Monday, after posting last week their biggest weekly percentage gain since the first half of July, as unrest in Egypt drove up fears over oil supply security in the Middle East.
Back home, the yields on 10-year 7.16% - 2023 bonds were trading 7 basis points higher at 8.95%, which is its 21 months high level, from its previous close of 8.88% on Friday.
The benchmark five-year interest rate swaps were trading unchanged at its Friday’s close of 8.94%.
The Reserve Bank of India has announced the auction of 364-days and 91-days Government of India Treasury Bills for notified amount of Rs 5,000 crore and Rs 7000 crore respectively. The auction will be conducted on August 21, 2013 using 'Multiple Price Auction' method.
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