India Bond Yields Hold Near 1-Week Low on Improving Cash Supply
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India’s 10-year government bond yields held near the lowest level in more than a week on speculation increasing cash supply in the banking system will drive demand for sovereign debt.
The nation’s lenders parked a net 225.6 billion rupees ($3.7 billion) via daily liquidity auctions at the Reserve Bank of India on Sept. 1, the most since October 2011, data compiled by Bloomberg show. They added another 201.85 billion rupees yesterday, signaling increased availability of funds. The growing cash supply is probably because of government spending at the beginning of the month, Harish Agarwal, a fixed-income trader at FirstRand Ltd. in Mumbai, said yesterday.