India Bonds Yields Fall Ahead Of Quarter-End, 2H Borrowing Eyed
Tuesday,
29-Sep-2020
03:26 PM (IST)
India’s federal government bond yields ended lower as some traders added positions ahead of the quarter-end, while market participants awaited the October-March borrowing schedule. The benchmark 5.77% bond maturing in 2030 ended at 98.03 rupees, yielding 6.04%, against 97.89 rupees and 6.06% yesterday. The Indian rupee was at 73.85 to the dollar, against 73.78 yesterday. The federal government is likely to announce its market borrowing schedule for the second half of the fiscal year tomorrow, according to a government official. The government raised its annual borrowing target to a record 12 trillion rupees in May. It has already borrowed 7.68 trillion rupees in April-September. Market participants also await clarity on the central bank’s management of bond supply through open market purchases. The central bank has bought bonds worth 571.32 billion rupees through special OMOs so far and will buy securities worth another 100 billion rupees on Oct. 1. India’s Monetary Policy Committee’s meeting scheduled for Sep. 29 to Oct. 1 has been rescheduled, and the new dates will be announced soon. The government is yet to appoint three new external members who will join the rate-setting panel. Asia’s third-largest economy contracted 23.9% from a year earlier in April-June, a period that saw stringent lockdowns to curb the spread of the coronavirus pandemic. India is the world's worst impacted nation after the U.S. with the Covid-19 tally rising to 6.15 million, including 96,318 fatalities. India’s economic recovery has started to show signs of fatigue and is expected to be subdued in the second half of the financial year, Nomura said. It expects India's rate-setting MPC to deliver 25-basis-points rate cuts in December and February. The benchmark Brent crude oil contract was 0.7% lower at $42.15 per barrel. India imports nearly 85% of its crude oil requirements.
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