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Government Security (G-Sec) prices rallied on Thursday as the Reserve Bank of India (RBI) purchased the benchmark 10-year G-Sec at a weighted average price, which was above the prevailing secondary market price at the special open market operation (OMO).
The 10-year G-Sec, carrying 5.79 per cent coupon and maturing in 2030 (5.79 per cent G-Sec 2030), ended 40 paise higher at ₹97.40, with its yield thawing almost 6 basis points (bps) to close at 6.1483 per cent over the previous close.
G-Sec/ bond price and yield have an inverse relationship, with the two moving in opposite directions. One basis point is equal to one-hundredth of a percentage point.
The central bank purchased the 10-year G-Sec at the OMO at a weighted average price of ₹97.38, with the weighted average yield being 6.1511 per cent.
On Wednesday, this security closed 37 paise down at ₹97. Its yield went up about 5 basis points to close at 6.2046 per cent. This was despite the RBI making an announcement the previous day that it would be conducting simultaneous purchase of four G-Secs and sale of four Treasury Bills for ₹10,000 crore each under the OMO.
The total amount of G-Secs tendered by the market participants under OMO purchase was at ₹75,020 crore against the notified amount of ₹10,000 crore.
The total amount of Treasury Bills bid by the market participants under OMO sale was at ₹44,250 crores crore against the notified amount of ₹10,000 crore.
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