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Thursday, May 13, 2021

Bond yield jumps after first G-SAP auction

The RBI purchased Rs 25,000 crore worth of bonds under G-SAP, under which it has committed to buying Rs 1 lakh crore of government paper between April and June to aid the absorption of the Centre’s massive Rs 12.06 lakh crore borrowing in FY22.

By: ENS Economic Bureau | Mumbai |
April 16, 2021 3:19:00 am
Reserve Bank of India, Sensex, G-SAP auction, business news, economy news, indian express economy newsIn a statement on its website, RBI said the order will not impact existing customers.

The benchmark 10-year bond yield rose by 11 basis points to 6.12 per cent with the Reserve Bank of India setting higher than expected cut-off yields at its first government securities acquisition programme (G-SAP) auction and inflation inching upwards. However, the rupee rose 74.93 against the dollar and the Sensex rallied 260 points to 48,803.68. The NSE Nifty rose by 77 points to 14,581.45.

The RBI purchased Rs 25,000 crore worth of bonds under G-SAP, under which it has committed to buying Rs 1 lakh crore of government paper between April and June to aid the absorption of the Centre’s massive Rs 12.06 lakh crore borrowing in FY22. The cut-off yield on 6.79 per cent securities for 2027 was 6.1303 per cent.

On the Sensex rally, Vinod Nair, head of research, Geojit Financial Services, said, “Market is becoming more cautious as states are increasing restrictions due to the havoc created by the virus.”

Meanwhile, a fall in 10-year US Treasury yield to 1.5496 per cent and strong US economic data fuelled a rally in stocks intra-day, with the Dow Jones — up 0.85 per cent — and the S&P 500 — up 0.96 per cent — both hitting new highs. Oil prices hit a near one-month high amid higher demand forecasts from the IEA.

With inputs from Reuters

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