Yields edge higher on fresh supply; 10 Yr benchmark bond closes 8.03%: Edelweiss

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Government securities
 Sovereign bond prices ended slightly lower today as participants choose to offload
stock after acquiring fresh supply through the auction. GoI set a cut off of 8.08%
for the 8.13% 2022 bond while the cut off yield for the 7.17% 2015 bond was set
at 7.84%. The benchmark 10 Yr bond closed 1 basis point higher at 8.03% with
the total volumes on the central banks trading platform at INR 71 bn level.


Non-SLR market
 State Bank of Travancore & SBBJ placed INR 1.50 bn & INR 1 bn respectively of
six month CD at 8.55%. Dena Bank placed INR 4.75 bn of three month CD at
8.15%.

Money markets
 LAF borrowing remained close to the INR 1 trn mark for the entire week reflecting
the persistent tightness in the liquidity situation. RBI is expected to intervene in
the market in the coming week, in order to rein back the liquidity situation into the
comfort zone. Call rates ended at 6.54% while the CBLO rates closed at 5.86%.

Swaps
 Swaps rates edged higher as traders preferred to pay fixed rates after People’s
Bank of China raised its reserve requirement by 50 bps. One year swap closed 2
bps higher at 6.72% while the five year swap closed 3 bps higher at 7.12%.