RBI cancels open market bond sale in surprise move | Reuters

BENGALURU (Reuters) - The Reserve Bank of India (RBI), in a rare move, cancelled a bond sale via open market operation (OMO) worth 100 billion rupees ($1.54 billion) that was scheduled for Nov. 23, citing “evolving liquidity conditions”. FILE PHOTO: A Reserve Bank of India (RBI) logo is seen at the entrance gate of its headquarters in Mumbai, India, June 7, 2017. REUTERS/Shailesh Andrade/File PhotoThe OMO sale of government securities was withdrawn due to "recent market developments and based on a fresh review of the current and evolving liquidity conditions", the RBI said in a statement on Friday. bit.ly/2jyz5ig The announcement may kick-off a short-lived rally next week in the bond market, with the 10-year government bond yield likely to fall by 5 basis points, traders said. “There will be a rally on Monday after the OMO news, but it won’t sustain. Many traders have burnt their fingers already and they are not ready to keep buying,” said a dealer with a private bank. The 10-year bond yield ended at 7.05 percent, after hitting a low of 6.94 percent earlier in the day after Moody’s upgraded India’s sovereign rating. The central bank has conducted nine OMO sales in 2017, all of which took place in the second half of the year, to drain excess liquidity from the banking system. Continuous OMO sales have been a key reason for the massive sell-off in the bond market since June-end, in addition to concerns over inflation and fiscal discipline. ($1 = 65.0100 Indian rupees)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: Nov 17, 2017 21:45 PM

Also Watch

Watch: Firstpost test rides the new Thunderbird 500X in Goa and walks you through the Royal Enfield Garage Cafe
  • Tuesday, April 17, 2018 Varun Dhawan on Shoojit Sircar's October, 5-star reviews and working with Anushka Sharma in Sui Dhaaga
  • Saturday, April 14, 2018 Ambedkar Jayanti: Re-visiting Babasaheb's ideals exposes fake Dalit politics of Rahul Gandhi and Congress
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See