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Sentiment remains subdued due to inflation concerns, 10 Yr bond trades at 8.0%
Government securities
Sovereign yields edged higher with the underlying sentiment remaining subdued
on concerns that the central bank may have to take further monetary policy
tightening steps in order to rein in the inflation as oil prices spurred inflationary
concerns. At the policy review on Thursday, the central bank highlighted that the
underlying inflationary expectation were accentuated and the recent rise in oil
prices was posing further upside risk. It raised its March end inflation projection to
8% from 7% projected two months ago. The ten year bond closed 2bps higher at
8% while the 8.13% 2022 bond closed 1 basis higher at 8.09%.
Swap rates ended up for the third straight day because banks paid fixed rates, as
global crude oil movement has increased the likelihood of further increase in the
policy rates. For the week ended 18th March, one year swap ended 13 bps higher
at 7.45% while the five year swap closed at 7.98%, up 12bps for the week.
Non-SLR market
CD issuances remained strong has banks raised funds to shore up their balance
sheets and refinance the maturing papers towards the end of the financial year.
Banks mopped up CDs amounting to INR 44bn compared to INR 32bn on
Thursday. Three month CDs were quoted at 9.90%-9.95% while one year CDs
were dealt at 9.95%-10.00%. State Bank of India placed INR9.8bn of one year CD
at 9.95% while Canara Bank placed INR 5bn of same maturity CD at 9.985%. BOI
and UCO Bank placed INR 2.50bn of three month CD at 9.73% & 9.80%
respectively
Money markets
Banks borrowing at the LAF floated around the INR 1.4trn mark however banks
have maintained a significantly higher CRR than required for the current week. Till
15th March bank maintained an average 11% excess CRR over the requirement
indicating the heavily skewed borrowing. Call rates ended the week at 7.47% while
the CBLO rates closed at the central bank’s lending rate of 6.75%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sentiment remains subdued due to inflation concerns, 10 Yr bond trades at 8.0%
Government securities
Sovereign yields edged higher with the underlying sentiment remaining subdued
on concerns that the central bank may have to take further monetary policy
tightening steps in order to rein in the inflation as oil prices spurred inflationary
concerns. At the policy review on Thursday, the central bank highlighted that the
underlying inflationary expectation were accentuated and the recent rise in oil
prices was posing further upside risk. It raised its March end inflation projection to
8% from 7% projected two months ago. The ten year bond closed 2bps higher at
8% while the 8.13% 2022 bond closed 1 basis higher at 8.09%.
Swap rates ended up for the third straight day because banks paid fixed rates, as
global crude oil movement has increased the likelihood of further increase in the
policy rates. For the week ended 18th March, one year swap ended 13 bps higher
at 7.45% while the five year swap closed at 7.98%, up 12bps for the week.
Non-SLR market
CD issuances remained strong has banks raised funds to shore up their balance
sheets and refinance the maturing papers towards the end of the financial year.
Banks mopped up CDs amounting to INR 44bn compared to INR 32bn on
Thursday. Three month CDs were quoted at 9.90%-9.95% while one year CDs
were dealt at 9.95%-10.00%. State Bank of India placed INR9.8bn of one year CD
at 9.95% while Canara Bank placed INR 5bn of same maturity CD at 9.985%. BOI
and UCO Bank placed INR 2.50bn of three month CD at 9.73% & 9.80%
respectively
Money markets
Banks borrowing at the LAF floated around the INR 1.4trn mark however banks
have maintained a significantly higher CRR than required for the current week. Till
15th March bank maintained an average 11% excess CRR over the requirement
indicating the heavily skewed borrowing. Call rates ended the week at 7.47% while
the CBLO rates closed at the central bank’s lending rate of 6.75%.
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