Bonds end flat as OMO amount disappoints
Reuters: Mumbai, Dec 20 2012, 03:51 IST
Bond yields ended flat on Wednesday as RBI said it would buy fewer bonds than it had previously, while long-end swap rates rose to three-week highs on continued disappointment over the lack of a rate cut.
RBI said it would buy up to R8,000 crore of bonds on Friday, less than the 120 billion rupees it had offered to buy via the two previous open market operations (OMOs) in December.
Dealers were widely expecting RBI India to announce an OMO after it desisted from lowering CRR at its monetary policy review on Tuesday.
The benchmark bond yield ended unchanged at 8.15%. The most traded was the 8.33% 2036 paper, one of the OMO bonds, which ended 1 basis point up at 8.24%.
Most banks and brokerages, including Barclays Capital and Standard Chartered Bank, remain bullish on government papers in the medium to longer term.
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