Bonds at over 2-week high on OMO hopes
However, there was an element of caution ahead of January wholesale price inflation data, due on Thursday.
The resumption of bond purchases are easing worries about a liquidity deficit that has seen borrowings from the central bank’s repo window surge to one-month highs.
The benchmark 10-year bond yield closed 3 basis points (bps) lower at 7.84%. It fell to 7.83% in the session, a level last seen on Jan 29, the day the central bank cut policy rates.
As for the WPI data, a Reuters poll expects the WPI to hit a three-year low of 7%. “If the headline and core numbers come in below expectations, trading may shift to the 7.75-7.85% range,” said Bagla. Volumes remained a healthy R35,070 crore on the central bank’s dealing platform.
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