Bond yields edged lower on Monday in the absence of a debt sale till the RBI meet and also on the back of RBI's scheduled debt purchase on Wednesday. In order to address the temporary liquidity deficit situation, the Reserve Bank has been infusing additional liquidity through 7/14/28 days term repo auctions in addition to the existing overnight repo under liquidity adjustment facility and standing liquidity facilities.
Accordingly, the Reserve Bank has decided to conduct Open Market Operations by purchasing the following government securities for an aggregate amount of Rs 10,000 crore on January 22, 2014 (Wednesday) through multi-security auction using the multiple price method.
On the global front, U.S. Treasury prices rose on Friday in-line with expectations on economic data and as trading volumes were light before a long holiday weekend. Meanwhile, brent crude edged down towards $106 per barrel on Monday, pulled lower by a strong dollar, while robust Chinese economic data helped ease some fears of a hard landing in the world's second-largest economy. China's economy grew 7.7 per cent in the quarter through December, down from 7.8 per cent the previous quarter
Back home, the yields on new 10 year Government Stock 2023 were trading 6 basis points lower at 8.57% from its previous close of 8.63% on Friday.
The benchmark five-year interest rate swaps were trading 5 basis points lower at 8.14% from its previous close of 8.19% on Friday.
The Reserve Bank of India (RBI) has announced the auction of 91 & 364 days Government of India Treasury Bills for notified amount of Rs 4,000 crore and Rs 3000 crore respectively. The auction will be conducted on January 22, 2014 using 'Multiple Price Auction' method.
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