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Swap rates ease marginally as system liquidity improves
Government securities
Sovereign yields ended largely unchanged with muted volumes. Bonds clocked a
volume of INR 55bn, keeping with the trend since the past couple of weeks.
However short end swap rates eased marginally, noting the sharp decline in the
LAF borrowing over the past two days due to the month end spending by the
government and the inflow in the form of coupon payments. The one year swap
eased 3bps to close at 7.40%. However the five year swap continues to trade at
the 8% plus levels since traders expect the central bank to take another look at
the policy rates in order to rein in the inflationary pressure.
Non-SLR market
Although system liquidity eased in the current fortnight, short term rates did not
recede with three month CD trading at the 9.65% level while the one year CD
trading at 10% levels. State Bank of Mysore and State Bank Hyderabad placed INR
2bn and INR 3.50bn of three month CD at 9.65%. IDBI Bank placed three month
CD for a quantum of INR 6bn at 9.70% and one year CD amounting to INR 3bn at
10.05%.
IOC raised INR 5bn through CP for a tenure of one month at 7.52%. In the current
week, HDFC is planning to raise INR 2bn via three year bond at 9.75% while L&T
Infra will open its 10-Yr infra-bond issue at a yield of 8.20%.
Money markets
Overnight rates eased due to the improvement in the system liquidity owing to the
inflows of coupon payments as well as payments in government schemes. RBI
injected only INR 675bn compared to INR 795bn on Tuesday through the LAF
window. Banks preferred to borrow at the CBLO window instead, where the rates
ended slightly lower than the central bank’s lending rate.
At the T-Bill auction, RBI set a cut off yield of 7.18% for the 91 day T-Bill
compared to 7.22% a week ago. The cut off yield for the 182 day T-Bill was set at
7.49%, 5bps higher than the previous fortnight.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Swap rates ease marginally as system liquidity improves
Government securities
Sovereign yields ended largely unchanged with muted volumes. Bonds clocked a
volume of INR 55bn, keeping with the trend since the past couple of weeks.
However short end swap rates eased marginally, noting the sharp decline in the
LAF borrowing over the past two days due to the month end spending by the
government and the inflow in the form of coupon payments. The one year swap
eased 3bps to close at 7.40%. However the five year swap continues to trade at
the 8% plus levels since traders expect the central bank to take another look at
the policy rates in order to rein in the inflationary pressure.
Non-SLR market
Although system liquidity eased in the current fortnight, short term rates did not
recede with three month CD trading at the 9.65% level while the one year CD
trading at 10% levels. State Bank of Mysore and State Bank Hyderabad placed INR
2bn and INR 3.50bn of three month CD at 9.65%. IDBI Bank placed three month
CD for a quantum of INR 6bn at 9.70% and one year CD amounting to INR 3bn at
10.05%.
IOC raised INR 5bn through CP for a tenure of one month at 7.52%. In the current
week, HDFC is planning to raise INR 2bn via three year bond at 9.75% while L&T
Infra will open its 10-Yr infra-bond issue at a yield of 8.20%.
Money markets
Overnight rates eased due to the improvement in the system liquidity owing to the
inflows of coupon payments as well as payments in government schemes. RBI
injected only INR 675bn compared to INR 795bn on Tuesday through the LAF
window. Banks preferred to borrow at the CBLO window instead, where the rates
ended slightly lower than the central bank’s lending rate.
At the T-Bill auction, RBI set a cut off yield of 7.18% for the 91 day T-Bill
compared to 7.22% a week ago. The cut off yield for the 182 day T-Bill was set at
7.49%, 5bps higher than the previous fortnight.
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