• Call money rate closed slightly lower at 7.25% on Tuesday compared with 7.30% on Monday due to improvement of liquidity in the banking system helped by government's month-end spending.
• The improvement in liquidity helped reduce bank borrowing from the RBI’s daily repo tender.
• Banks net borrowed Rs 66,375 cr from the RBI Repo auction on Tuesday compared with Rs 72,525 cr of borrowing on Monday.
• Gilt prices rose sharply on Tuesday helped by the surprise announcement of open market operations (OMOs) to purchase gilts by the RBI aftermarket hours on Monday.
• Short covering by market participants also helped gilt prices during the day.
• The 10-year benchmark 8.15%, 2022 paper closed at 7.39% yield on Tuesday compared with 7.46% yield on Monday.
• Bond prices also rose on expectation that the government may soon notify an increase in foreign institutional investors' investment limit for government securities, as the present limits are mostly utilised.
• Sentiments for gilts also improved after the RBI tightened norms for import of gold, a move which is expected to ease the country’s wide current account deficit (CAD).
• Further rise in gilt prices were however capped by profit booking.
• The improvement in liquidity helped reduce bank borrowing from the RBI’s daily repo tender.
• Banks net borrowed Rs 66,375 cr from the RBI Repo auction on Tuesday compared with Rs 72,525 cr of borrowing on Monday.
• Gilt prices rose sharply on Tuesday helped by the surprise announcement of open market operations (OMOs) to purchase gilts by the RBI aftermarket hours on Monday.
• Short covering by market participants also helped gilt prices during the day.
• The 10-year benchmark 8.15%, 2022 paper closed at 7.39% yield on Tuesday compared with 7.46% yield on Monday.
• Bond prices also rose on expectation that the government may soon notify an increase in foreign institutional investors' investment limit for government securities, as the present limits are mostly utilised.
• Sentiments for gilts also improved after the RBI tightened norms for import of gold, a move which is expected to ease the country’s wide current account deficit (CAD).
• Further rise in gilt prices were however capped by profit booking.
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