BLBG: Ten-Year Bond Yields Hold Near Two-Week Low on Demand From Indian Lenders
India’s 10-year bond yields held at their lowest level in two weeks on speculation banks will increase debt purchases to meet the central bank’s reserve requirement rules.
Indian banks must hold a quarter of their deposits in government bonds. Deposits rose 14.4 percent from a year earlier to a record 46.7 trillion rupees ($1 trillion) as of Aug. 27, according to data published by the Reserve Bank of India. The government will finalize the borrowing calendar for the second half of the fiscal year ending in March today, a finance ministry official, who declined to be identified, said yesterday.
“Demand from banks to meet the statutory liquidity ratio needs is likely to increase,” said Krishnamurthy Harihar, a treasurer at FirstRand Ltd. in Mumbai. “I expect a token reduction in the borrowing program.”
The yield on the 7.8 percent note due May 2020 was little changed at 7.94 percent as of 10.15 a.m. in Mumbai, according to the central bank’s trading system. The price was at 99.07 per 100 rupee face amount.
To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
