10-year Benchmark Bond

Shields banks from adverse impact from bond portfolio

Around a year ago, the yield on the 10-year bond was more than 220 bps higher than that on the 364-day T-bill

As worries deepen for inflation in India, 10-year yield jumps and swaps reflect more rate hikes

Yield on the 10-year benchmark bond closed at 7.37 per cent, versus 7.36 per cent at previous close

The MPC pitched for a high number of 50 bps, which is significant because if combined with the inflation forecast, it indicates that more hikes are coming

The yield on 10-year benchmark bond spiked 9 bps to touch 7.2% after the news

Traders said the rising global oil prices, heavy supply of bonds at the weekly auctions and high domestic retail inflation will all sustain the upward pressure on yields

This gives credence to the theory that the central bank may not want to issue a fresh set of 10-year paper in a hurry and would rather continue with the existing security

The rejection of the bids brought down yields by 2 basis points and the 10-year bond closed at below 6 per cent again, at 5.99 per cent

This was after the RBI assured the market of ample liquidity and another round of secondary market purchase of Rs 35,000 crore

Consumer price index (CPI)-based inflation rose to 5.52 per cent in March, from 5.03 per cent in February. Core inflation was at 5.7 per cent.

In the first auction of the fiscal year, the RBI raised Rs 37,853 crore using greenshoe options instead of the planned Rs 32,000 crore

Shorter-duration funds will benefit from being able to reinvest at regular intervals

A rise in sovereign bond yields means a rise in the interest rate in the economy

RBI must be mindful of inflation risks of higher borrowing

The 10-year bond yields continued to rise for the fourth straight session to close at 6.202 per cent from its previous close of 6.135 per cent

Apex bank buys nearly Rs 15,000 cr in just the 10-year bonds out of four securities scheduled in the OMO. It may have also intervened in the market

The central bank on Friday devolved nearly the entire bond auction on primary dealers, as the markets were demanding higher yields for five-year and 10-year bonds being sold

The repeated issue of such bonds takes away some of its value in the eyes of investors, say experts

The central bank received bids for Rs 1,13,654 crore, or over 5x the Rs 20,000 crore amount on offer