RBI's OMO buys get a strong response amid high prices

Synopsis

Bids offered for this OMO circular were worthy ₹1.32 lakh crore, against the notified magnitude of ₹50,000 crore. The Reserve Bank of India (RBI) has scheduled further enslaved purchases worthy ₹75,000 crore for the period of May with an purpose to quicken the gait of argumentation complaint transmissions.

Mumbai: The cardinal bank's bond purchases successful unfastened marketplace operations (OMO) connected Tuesday saw beardown demand, with marketplace participants offering bonds worthy much than treble the notified amount. Prices for the bonds were majorly astatine a premium from marketplace prices, and successful enactment with expectations, treasury heads said.

Bids offered for this OMO circular were worthy ₹1.32 lakh crore, against the notified magnitude of ₹50,000 crore. The Reserve Bank of India (RBI) has scheduled further enslaved purchases worthy ₹75,000 crore for the period of May with an purpose to quicken the gait of argumentation complaint transmissions.

"Prices for astir bonds were astatine a premium, but for the insubstantial maturing successful 2031, which was priced astatine a discount from the markets," said Mataprasad Pandey, vice president astatine Arete Capital Services. "The auction had bully request and further auctions are expected to spot large request arsenic good due to the fact that marketplace participants cognize that they volition get a bully price."

The auction did not person ultra agelong tenured bonds, and maturities ranged from 3- to 14-year paper. Securities maturing successful 2035 - the 7.10% GS 2034 insubstantial - saw the maximum demand.

Investors person tried to exit their positions by selling the 7.10 2034 insubstantial to RBI, arsenic they would privation to marque abstraction for the caller 10-year paper, a enslaved trader from a backstage assemblage slope said.

RBI auctioned a caller 10 twelvemonth insubstantial connected Friday, May 2, portion the 7.10% GS 2034 insubstantial utilized to beryllium the benchmark information earlier October 2024.

The adjacent OMO acquisition is scheduled for Friday, May 9 for a quantum of ₹25,000 crore.

Yields of the 10-year benchmark information closed astatine 6.35% connected Tuesday, up 3 ground points from its erstwhile close.

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