RBI sets Rs 109.83 cut-off for 9.85% 2015 bond

Our Banking Bureau

Mumbai, Nov 19: The Reserve Bank of India (RBI) awarded a cut-off price of Rs 109.83 (YTM 6.6212 per cent) to the Rs 4,000 crore, 9.85 per cent 2015 government stock auctioned on Monday.

During the day, government securities prices continued its uptrend, rising by around 10-15 paise in the long-end post-auction. The auctioned 9.85 per cent 2015 stock gained to Rs 110.10-110.12 post-auction from Rs 110.05. The auction received an overwhelming response of 382 bids for Rs 12,193.353 crore.The RBI accepted 113 bids for Rs 4,000 crore.

Earlier Monday, G-Sec rose sharly despite the auction later in the day. The ample liquidity in the banking system was said to be the primary reason for the upbeat market sentiment. “There are good inflows in November and, hence, there is no pressure on the liquidity situation in the banking system,” a dealer said.

The 9.85 per cent 2015 saw the most number of trades on the NSE’s wholesale debt market and a price rise of nearly 55 paise before the auction results were out.

The 9.85 per cent 2015 opened at Rs 109.40 and rose to Rs 110.05 in late trade. The NSE’s wholesale debt market saw a trading volume of Rs 4,364 crore. Trades worth Rs 600 crore were seen at the 9.85 per cent 2015 paper, where the 11.03 per cent 2012 and 11.50 per cent 2011A papers amounted to Rs 550 crore and Rs 530 crore respectively. GoI-Sec prices are expected to continue its bull run in the near future.

The rupee appreciated to 47.9400 per dollar in intra-day trades on the back of good dollar inflows. Banks offloaded dollars accumalated over the long Diwali weekend. Light corporate demand in early trade saw the rupee weaken to 47.9700 per dollar but steady supplies soon helped the rupee recover from its intra-day low. Persistent absorbing of excess dollars by state-run banks, however, kept the rupee from appreciating sharply. It ended at 47.9450/9500 per dollar, whereas it had opened at 47.9600/9650 per dollar.