Snapping three consecutive weeks of losses, Indian government bonds registered gains for the week that has just concluded, helped by the assurance from Reserve Bank of India (RBI) that additional bond purchases would be conducted if the need arise.
During the first week of the October month, bonds witnessed much-needed relief with yields falling as much as 10 basis points as sentiments improved after rupee and Current Account Deficit (CAD) showed signs of correction. The rupee, which was hovering around 65/USD level in the month of September, strengthened to 61-level against US dollar during the week. Also, the CAD data released by government during the week showed the gap widened at a less-than expected pace during Apr-Jun quarter of the current fiscal.
The central bank deputy governor HR Khan on Friday said that RBI will buy more bonds via open market operations (OMOs). RBI is already set to buy bonds worth Rs 100 billion on Monday.
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