Related News:
Ten-Year Bonds Gain a Second Day on Speculation India's Inflation May Slow
India’s 10-year bonds gained for a second day on speculation the nation’s inflation rate will extend a three-month decline.
A government report will probably show next week that annual gains in the benchmark wholesale-price index slowed last month to 9.6 percent, the least since January, according to the median estimate of 13 economists in a Bloomberg News survey. The Reserve Bank of India, which has raised borrowing costs four times so far this year to cool inflation, is scheduled to review monetary policy on Sept. 16.
“The bond market outlook depends on how the inflation rate will turn out in the coming months,” said R.V.S. Sridhar, senior vice president at Axis Bank Ltd. in Mumbai. “Recent wholesale price index numbers were promising. Yields may remain in a range in the short term.”
The yield on the 7.80 percent note due May 2020 dropped one basis point to 7.94 percent as of the 5:00 p.m. close in Mumbai, according to the central bank’s trading system. The price rose 0.08, or 8 paise per 100 rupee face amount, to 99.07.
The reverse-repurchase rate, at which the central bank drains cash from banks, is at 4.5 percent, while the repurchase rate, which it charges on overnight loans, is at 5.75 percent.
India will offer 110 billion rupees ($2.4 billion) of bonds maturing in 2015, 2022 and 2027 tomorrow, which are part of the government’s record 4.57 trillion rupees borrowing for the fiscal year that began April 1.
The cost of one-year interest-rate swaps, or derivative contracts used to guard against fluctuations in borrowing costs, was unchanged. The rate, a fixed payment made to receive floating rates, was at 6.11 percent.
To contact the reporters on this story: Anil Varma in Mumbai at avarma3@bloomberg.net; V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net
Rate These Stories
Rate this Page