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Gilts stick to tighter range; Call rates and LAF borrowing surge
• Gilts continued to be dictated by the same set of factors that have restricted their
movement to a marginal upper bias amidst subdued volumes. Trading action was further
limited ahead of the extended weekend for the bond market.
• The yields improved a bit and closed marginally lower at 8.38% vs the previous close of
8.39% with the range for the day being 8.37%-8.41%. The 9.15%, 2024 bond which is the
second most liquid paper showed significant movement and rallied from 8.39% to 8.34%.
• The OIS market had multiple cues to fall back on as risk aversion took centre stage
globally when the China manufacturing PMI for February slipped to a 4-month low. As a
result, swaps continued being in the receiving mode and rates were sharply lower across
tenors. The 1Y OIS closed at 8.09-8.15% vs 8.15-8.21%, while the 5Y swap ended at 7.48-
7.54% vs 7.55-7.61%.
Non-SLR Market
PSB placed 3M CD worth INR 5bn @ 11%. Corporation Bank placed 1Y CD worth INR 4bn @
10.50%. Vijaya Bank placed same tenor @ 10.59% for INR 2.5bn.
Money Market
In order to meet the reserve requirement for this reporting fortnight in a truncated week,
call rates surged with deals being struck as high as 10%. The WAR for the day was 9.40% -
more than 40bps higher than the previous session. The LAF borrowing across the 2 windows
combined today was once again back at extreme stress levels of INR 1.89tn. The MSF
window was also accessed yesterday with borrowing of INR 22.5bn.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gilts stick to tighter range; Call rates and LAF borrowing surge
• Gilts continued to be dictated by the same set of factors that have restricted their
movement to a marginal upper bias amidst subdued volumes. Trading action was further
limited ahead of the extended weekend for the bond market.
• The yields improved a bit and closed marginally lower at 8.38% vs the previous close of
8.39% with the range for the day being 8.37%-8.41%. The 9.15%, 2024 bond which is the
second most liquid paper showed significant movement and rallied from 8.39% to 8.34%.
• The OIS market had multiple cues to fall back on as risk aversion took centre stage
globally when the China manufacturing PMI for February slipped to a 4-month low. As a
result, swaps continued being in the receiving mode and rates were sharply lower across
tenors. The 1Y OIS closed at 8.09-8.15% vs 8.15-8.21%, while the 5Y swap ended at 7.48-
7.54% vs 7.55-7.61%.
Non-SLR Market
PSB placed 3M CD worth INR 5bn @ 11%. Corporation Bank placed 1Y CD worth INR 4bn @
10.50%. Vijaya Bank placed same tenor @ 10.59% for INR 2.5bn.
Money Market
In order to meet the reserve requirement for this reporting fortnight in a truncated week,
call rates surged with deals being struck as high as 10%. The WAR for the day was 9.40% -
more than 40bps higher than the previous session. The LAF borrowing across the 2 windows
combined today was once again back at extreme stress levels of INR 1.89tn. The MSF
window was also accessed yesterday with borrowing of INR 22.5bn.
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