The Reserve Bank of India net bought bonds worth 572.10 billion rupees ($6.20 billion) over the four trading sessions in the week, making it the third consecutive week of purchases. The settlement of the transactions takes place one day after the trade.
* Infusing liquidity is the main purpose of bond purchases, but they also impact yields
* RBI had bought bonds worth 99 billion rupees in the week ended February 27 and 28.15 billion rupees in the week ended February 20
* RBI had bought bonds worth 173.95 billion rupees in January, 41.55 billion rupees in December and 272.80 billion rupees in November, taking aggregate secondary market purchase to 1.19 trillion rupees for the financial year
* “From a demand vs supply narrative, markets have remained well supported as RBI has continued to undertake on-screen as well as scheduled OMOs,” Basant Bafna, head of fixed income at Mirae Asset Investment Managers (India)* “With supply for the financial year having been completed, support from RBI has helped anchor yields.”* RBI has bought bonds worth a record 8.53 trillion rupees so far this year
* Total liquidity infusion, including other measures this fiscal is at 13.33 trillion rupees
* Traders say, the central bank was an active buyer in the secondary market in the current week, and also anticipate purchases to continue till the end of the financial year
($1 = 92.3320 Indian rupees)
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