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Mumbai, July 7

Bond prices fell for the second consecutive day after the Budget, as the Reserve Bank of India announced an auction of Rs 15,000 crore worth of government securities. On Monday, bond prices had crashed following the announcement of higher government borrowing programme in the Budget. The fear among participants is that the excess borrowing will lead to additional supply of government papers, which may push up bond yields. “If the RBI does not come up with an aggressi ve open market operation, there is no reason why banks will participate in the auction,” said a bond dealer. On Tuesday, the total traded volumes were much lower at Rs 8,330 crore (Rs 12,395 crore).

— Our Bureau

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