Indian government bonds continue to trade lower, following the absence of a RBI rate cut. The benchmark 8.15% 2022 bond is at 99.76 vs an intraday high of 100.20 and 99.80 at Friday's close. The head of a foreign primary dealership says the cut in the cash reserve ratio rules out RBI bond buybacks in the medium term, which would have been more positive for bonds. The RBI's policy statement wasn't as dovish as traders were expecting, and few are betting on a rate cut in October. The next trigger for bonds would be the government's borrowing program for the second half of FY12, likely to be announced next week. Until then the benchmark 8.15% 2022 bond is likely to trade in a 8.15%-8.25% band; it is last at 8.18%.
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