INSUBCONTINENT EXCLUSIVE:
India's benchmark 10-year bond yields rose on Tuesday, while the rupee weakenedMUMBAI: India's benchmark 10-year bond yield rose on
Tuesday, while the rupee weakened, due to global risk aversion amid an escalation of tensions in Ukraine, which also pushed up oil prices
close to $100 a barrel.India's benchmark 10-year bond yield closed at at 6.75 per cent, up 6 basis points from its previous close."The
jump in oil, auction and overall risk off is hurting markets
Sources saying government will borrow the cancelled auctions too
But when? There is just one month left," a senior trader at a private bank said.Reuters earlier reported the government may conduct more
debt auctions after its last scheduled tender for the fiscal year on Friday to take advantage of the relatively low cost of borrowing.The
government, after cancelling two auctions worth 240 billion rupees each, decided to raise 230 billion rupees via a sale on Friday, weighing
on investor sentiment, with a large part of the market having assumed the borrowing for this year was behind them.In the new fiscal year
starting April, the government is scheduled to borrow a record 14.31 trillion rupees and market participants are keenly waiting to see how
much the Reserve Bank of India (RBI) would be willing to support it and what measures it announces.The RBI has over the last two years
resorted to open market purchases of bonds and also buy/sell swaps in an attempt to ensure the borrowing programme goes through smoothly.The
partially convertible rupee closed at 74.8750 per dollar, weaker compared with its previous close of 74.5050.Emerging market assets dropped
after Russian President Vladimir Putin formally recognised two breakaway regions in eastern Ukraine, sending Russian stocks tumbling and the
Ukrainian hryvnia to multi-year lows.The uptick in global crude to near $100 a barrel will also impact India's import bill and widen the
current account deficit apart from fuelling imported inflation in the country.
