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Bond yields edge higher on Rupee’s depreciation

22 Oct 2013 Evaluate

Bond yields edged higher tracking Rupee’s depreciation to week’s low level on the back of strong dollar demand in view of its strength in the overseas market. Nevertheless, absence of a government bond auction this week also supported bond prices.

On the global front, US Treasuries prices fell on Monday, a day ahead of the release of the government's September employment data, which was delayed by the 16-day partial federal government shutdown. Meanwhile, U.S. crude oil slipped below $99 a barrel on Tuesday, hitting its lowest since July as crude oil inventories rose more than expected in the world's largest oil consumer.

Back home, the yields on 10-year 7.16% - 2023 bonds, were trading 1 basis point higher at 8.61% from its previous close of 8.60% on Monday as the rupee extends weakness to a third day.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 8.23% from its previous close of 8.24% on Monday.

The Reserve Bank of India has announced the auction of 182-days Government of India Treasury Bills for notified amount of Rs 6,000 crore each. The auction will be conducted on October 23, 2013 using 'Multiple Price Auction' method.

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