All
 

 

Just in:  

You are here: Home»Markets»Fixed Income»Asia»India bond yields end up on RBI pause; focus shifts to growth

indian-bondMUMBAI: Indian bond yields ended higher on Tuesday after the central bank kept key policy rates and the cash reserve ratio unchanged, but the rise was capped as the Reserve Bank of India said it would shift its focus to growth, reinforcing expectations of easing as early as January.

 

Bonds also gained as traders interpreted the hold in the CRR as a signal that the RBI will do more open market operations (OMOs).

 

The liquidity deficit in the banking system, as evidenced by repo bids, has risen to an over eight-month high.

 

However, swap rates rose as some traders betting on a rate cut as early as Tuesday unwound received positions.

 

"The lack of a CRR cut means that OMOs will continue, which is extremely supportive of bond prices.

 

The text suggests that the January policy should see a repo rate cut, so it makes sense to continue to remain long bonds," said Arvind Chari, fixed income fund manager at Quantum Asset Management.

 

The benchmark bond yield ended up 1 basis point (bp) at 8.15 percent, after rising to 8.18 percent after the policy announcement.

 

Standard Chartered Bank, in a note after the policy, advised investors to buy 10-year bonds with a target of 7.80 percent.

 

India's short-end 1-year OIS rate ended up 4 bps at 7.66 percent while the benchmark 5-year OIS was 3 bps up at 7.13 percent.

 

Analysts had been hopeful the RBI would move towards cutting interest rates in the January-March quarter, in line with its previously stated guidance, after inflation in November hit a 10-month low.

 

However, the absence of a cut in the CRR came as a surprise to some analysts, although the central bank assured that it would manage liquidity conditions to support growth.

 

Copyright Reuters, 2012
**


 



 
Index Closing Chg%
Arrow DJIA 16,424.85 1.00
Arrow Nasdaq 4,086.23 1.29
Arrow S&P 1,862.31 1.05
Arrow FTSE 6,584.17 0.65
Arrow DAX 9,317.82 1.57
Arrow CAC-40 4,405.66 1.39
Arrow Nikkei 14,417.68 3.01
Arrow H.Seng 22,696.01 0.11
Arrow Sensex 22,277.23 0.92





where to buy

cheap wedding dresses

online - weddingdresstrend.com

Buy cheap Nike Mercurials cleats at mercurialscleats.com
cheap wedding dresses on SiteSteer.com - Best Online Wedding Store


Banking Review 2013


Buy direct from

China free shipping trade platform

Annual2012/13
Foreign Debt $60.9bn
Per Cap Income $1,368
GDP Growth 3.6%
Average CPI 7.5%
MonthlyFebruary
Trade Balance $-1.433 bln
Exports $2.167 bln
Imports $3.600 bln
WeeklyApril 14, 2014
Reserves $9.713 bln