The Hindu Business Line : Bonds fall as uncertainty continues

Bond prices fell as uncertainty over oil bonds being given SLR status continued. Expectations that Government borrowing might be higher in the next fiscal, also added to the worry, said dealers. “There is not much incentive to hold bonds right now. I expect this situation to last till March end, unless the RBI cuts interest rates,” said a bond dealer with a private bank. There is also talk among market participants, that the RBI may cut CRR rates to remove the discounts in the forward premia, as there is shortage of both dollars and rupee. A reduction in CRR will infuse some liquidity into the system. Total traded volumes on the order-matching system were at Rs 5,245 crore (Rs 5,595 crore). The 7.99 per cent-9 year-2017 paper opened at Rs 102.78 (7.57 per cent YTM) and closed at Rs 102.89 (7.55 per cent YTM), against the previous close of Rs 102.94 (7.54 per cent YTM).

The 8.33 per cent opened at Rs 105.25 (7.86 per cent YTM) and closed at Rs 105.18 (7.87 per cent YTM), against the previous close of Rs 105.35 (7.85 per cent YTM).

— Our Bureau

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