India Bond Yields Steady Amid Lack Of Triggers
Monday,
10-May-2021
01:14 PM (IST)
Indian federal government bond yields were largely unchanged in the afternoon session on lack of fresh cues. The benchmark 5.85% bond maturing in 2030 changed hands at 98.82 rupees, yielding 6.01%, at 1:00 p.m. in Mumbai against 98.81 rupees, yielding 6.02% at the previous close. The Indian rupee was at 73.40 to the dollar against 73.51 on Friday. India, the worst pandemic-hit country after the U.S., has been reporting global record spikes in Covid-19 caseloads. Many states have imposed lockdowns as infections have swamped health infrastructure. The federal government has warned of another wave of the pandemic. India’s central bank last week announced a slew of measures that included liquidity support to the healthcare sector and restructuring for small-ticket individual and small business loans. The Reserve Bank of India aims to buy federal government debt worth one trillion rupees during April to June under its quantitative easing programme. The RBI had already bought bonds worth 250 billion rupees and will buy 350 billion rupees worth of notes on May 20. The central bank’s rate-setting panel has committed to stay accommodative to aid the pandemic-hit economy, while ensuring inflation remains within target. Retail inflation data for April will be released on Wednesday. Barclays expects inflation to have eased to 4.04% in April from 5.52% in March, driven primarily by the high base effect and unseasonal fall in some food prices. The benchmark Brent crude oil contract was trading 0.6% higher at $68.65 per barrel after a major cyberattack forced the shutdown of critical fuel supply pipelines in the U.S. Higher fuel prices pose inflation rise in the country as India imports nearly 85% of its crude oil requirements.
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