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Mumbai, Oct. 5

Bond prices fell after the limit under the Market Stabilisation Scheme was raised. The RBI uses the MSS instruments like Treasury-bills to mop up excess liquidity in the banking system. Bond prices opened negative and ended 10-15 paise lower, said dealers. The total traded volumes on the order matching system were at Rs 1,930 crore (Rs 2,230 crore). A bond dealer with a private bank said that yields on both the short end and the 10-year papers moved up. “Under MSS, m ore of short end papers would be auctioned,” he said. The 7.49 per cent 10-year-2017 paper opened at Rs 97.14 (7.92 per cent YTM) and closed at Rs 97.05 (7.94 per cent YTM) against the previous close of Rs 97.19 (7.91 per cent YTM). The 7.99 per cent 10-year-2017 paper opened and closed at Rs 100.5 (7.91 per cent YTM) against the previous close of Rs 100.63 (7.89 per cent YTM). Inflation too was higher than expected at 3.42 per cent for the week ended September 12, against 3.23 per cent in the previous week. The market is now waiting for further auction announcements, said the dealer. —

Our Bureau

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