India Bond Yields Down As RBI To Resume Note Purchases

Monday,   18-Jan-2021   01:21 PM (IST)

Indian federal government bond yields stayed lower in afternoon trade as the central bank is set to resume its note purchases this week. The benchmark 5.77% bond maturing in 2030 changed hands at 98.59 rupees, yielding 5.96% at 1:00 p.m. in Mumbai, against 98.42 rupees, yielding 5.99%, on Friday. The Indian rupee was at 73.20 to the dollar against 73.07 on Friday. The central bank will purchase 2024, 2027 and benchmark bonds worth 100 billion rupees on Jan. 21, its first such auction in nearly three months. It has been conducting so-called special OMOs where it buys and sells federal government notes, while it is also buying state debt via OMOs. New Delhi is expected to unveil its budget for the next fiscal year on Feb. 1 amid expectations that fiscal deficit and borrowings will remain high to support an economy battered by the Covid-19 pandemic. India's government should look at defining its fiscal roadmap in terms of measurable parameters relating to the quality of expenditure, RBI Governor Shaktikanta Das said over the weekend. The central bank last week began its phased withdrawal of liquidity with a 14-day reverse repo where banks parked over two trillion rupees. The benchmark Brent crude oil contract was trading 0.5% lower at $54.80 per barrel. India imports nearly 85% of its crude oil requirement.