The RBI’s OMO purchase programme, which infused about Rs 1.5 lakh crore of durable liquidity into the system, helped cap losses and provided selective trading opportunities
During October 16-20, liquidity in the banking system remained mostly in deficit mode, expect on October 17, when liquidity was in surplus of around Rs 1,512.59 crore.
Soon after the announcement by the RBI, yield on the 10-year benchmark government bond started rising. In the morning trade it rose 7-8 basis points and later, in the afternoon trade, it rose by 15 bps.
Mohan Shenoi, President - Group Treasury & Global Markets, Kotak Mahindra Bank OMOs sees the 10-year bond yields in the range of 8.5-9%.
Manish Wadhawan, MD & HD -Interest Rates, HSBC sees the 10-year yields would hover between 8.50-8.75 percent for time to come till normalisation of rates happens.