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Mumbai, Sept 27

The bond market was range-bound with the 10-year Government paper moving just one basis point in day trade. The market was rife with rumours that the RBI may announce a CRR hike or enhance the limit of its MSS programme to absorb the excess inflows, said dealers. A bond dealer with a private bank said,

“Despite intervention of the RBI, the rupee appreciated. In order to check the rise, the RBI would buy dollars, which would infuse more rupee liquidity into the system. Therefore, the central bank may have to either hike the CRR or enhance the MSS limit.” The MSS limit is Rs 55,000 crore and the RBI has room left only to raise about Rs 17,000 crore. Therefore, it seems that an enhancement of the limit is likely, the dealer said. The bond market was slightly bearish because of this sentiment, he added. The total traded volumes on the order matching system were Rs 2220 crore (Rs 2,610 crore). The 7.49 per cent 10-year benchmark 2017 paper opened at Rs 97.20 (7.91 per cent YTM) and closed at Rs 97.1 (7.93 per cent YTM) against the previous close of Rs 97.25 (7.90 per cent).

– Our Bureau

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