Bonds halt 2-day advance on inflation concerns

Written by Bloomberg | Updated: Jan 30 2011, 05:12am hrs
The 11-year bonds halted a two- day gain on speculation investors will refrain from buying debt as accelerating inflation erodes the value of their holdings. Reserve Bank of India governor Duvvuri Subbarao said on Friday rising prices are a dominant concern for the central bank. Policy makers increased the overnight lending rate by 25 basis points on January 25 and raised the inflation forecast for this year. The yield on the most-traded 8.08% bond due August 2022 was little changed at 8.18 %on Friday. The yield fell 7 basis points this week. The cost of one-year interest-rate swaps fell 3 bps this week to 7.36%.