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Our Bureau

Mumbai, Feb. 26

Bond prices spurted by around 25 paise reacting to the RBI's decision on resuming interest payments on the Cash Reserve Ratio maintained by banks. Total traded volumes on the order-matching system were around Rs 3,000 crore.

Dealers said sentiment in the market was positive as interest payments on CRR would increase liquidity and improve banks' profitability. However, profit-booking towards the end of trading erased gains by around 10 paise. "The bond market is likely to be cautious on Tuesday ahead of the Union Budget. The Government's borrowing programme next fiscal is likely to be pruned by around Rs 10,000 crore, " said a dealer at a private bank. The 8.07-10 year-2017 benchmark paper opened at Rs 101.10 (7.90 per cent YTM) and closed at Rs 101.22 (7.89 per cent YTM) against Friday's close at Rs 100.94 (7.93 per cent YTM). The 7.37 per cent - 7 year-2014 paper opened at Rs 97 (7.92 per cent YTM) and closed at Rs 97.11 (7.90 per cent YTM), against the previous close at Rs 96.89 (7.95 per cent YTM).

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