The Telegraph
Since 1st March, 1999
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Money market wobbles

Mumbai, July 30: It was not business as usual for the bond, forex and money markets, where trading suffered as the bandh kept bankers and executives at home.

Gilt prices ended the day steady, around levels seen on Tuesday. The yield to maturity (YTM) on the benchmark 10-year paper was unchanged at 5.63 per cent.

The Reserve Bank mopped up Rs 8,000 crore via the on-tap sale of 6.20 per cent, 10-year paper issued by all 28 states.

PSU banks, traders, pension funds and insurance companies were active at the state loan counters, dealers said. The central bank said it received bids worth Rs 18,500 crore, way above the target of Rs 8,000 crore.

“Excess subscriptions are being refunded to applicants after making partial allotment in respect of states whose loans are oversubscribed,” the central bank said.

Dealers said the auction sailed through comfortably as the yield of 6.20 per cent was attractive compared with the current yield on the benchmark 10-year paper of 5.63 per cent,” a dealer affiliated to a bank said.

The inter-bank call money market witnessed patchy trading with a few deals struck at 4.75-5.00 per cent, dealers said.

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