Business Yield spread between India’s new benchmark bond and old 10-year bond has narrowed by 10 basis points in the span of a week reflecting increased issuance in the new paper. RBI has conducted 2 auctions of 70 billion rupees each in the 8.15 percent paper, while the outstanding in the 8.79 percent stands at 830 billion rupees. Rajesh Sharma Money Matters Financial Services Ltd says interest in 8.79 percent 2021 paper is also due to possibility of more OMOs in the paper. As he thinks spread might narrow more in the coming days. The new 10-year bond yield down 1 basis point to 8.16 percent while the 8.79 percent 2021 bond fell by a larger 4 bps to 8.34 percent. OIS rates marginally lower on bond yields India 1-year OIS down 1 basis point at 7.80 percent, while 5-year rate also 1 basis point lower at 7.22 percent. Rajesh Sharma Money Matters Financial Services Ltd says mild receiving is in line with retreat in bond yields. Traders still waiting to see whether RBI announces an OMO this week. Repo bids rise to 979.15 billion rupees as against 904.60 billion rupees via two repo auctions on Friday. Indian rupee hits 1-1/2 month peak on dlr inflows The Indian rupee rose to a one-and-a-half-month high on Tuesday as custodian banks sold dollars that could be funnelled into domestic shares or debt investments, following improved foreign investor sentiment. The government last week increased foreign investor limits in government debt by $5 billion to $20 billion and the increased limits will be auctioned by the stock market regulator on Wednesday. Portfolio investors too have turned bullish after the Indian government released draft rules last week and said the general anti avoidance rules, or GAAR, would not apply retroactively, a big concern for such investors. Foreign investors were net buyers of 5.91 billion rupees worth of shares on Monday, provisional NSE data showed. India’s main share index was trading up 0.4 percent. Rajesh Sharma CMD Money Matters Fin Services Ltd said some inflows for debt auctions, NDF unwinding and stop-losses, all were helping the rupee. If the current momentum sustains then the rupee can rise to 54.60 levels later in the day. However, not all market participants were certain the inflows were for the debt auctions as interest in the auction is expected to be low due to the three-year lock-in clause and also on account of July 4 being a U.S. holiday. Intraday the spot was at 54.79/80 per dollar, after hitting 54.75, its strongest level since May 22. The rupee had closed at 55.43/44 on Monday. The one-month offshore non-deliverable forward contracts were quoted at 55.12 per dollar, as compared to 55.75 at close on Monday. About the Author: 相关的主题文章: