Govt to sell four dated securities for Rs 15,000 crore on Friday
Ind-Ra further said the 10-year G-sec yield could trade at 6.78-6.89% (6.82% at close on November 4).
Government will sell four dated securities for Rs 15,000 crore on November 11, of which up to 5% will be allotted to individuals and institutions.
The auctions will be conducted using multiple price method, the Reserve Bank said in a statement. The stocks will qualify for the ready forward facility.
"Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities," RBI said.
Rating agency Ind-Ra said the government's upcoming repurchase auction (Rs 150 billion) will alleviate some pressure on demand-supply dynamics in the debt market as a combined gross supply of over Rs 1,000 crore is scheduled this week in the form of both central and state government borrowings.
Easy inter-bank liquidity conditions suggest limited need for durable liquidity injection, keeping scope for open market purchase operations dim in the near term, it said in a report.
"Incremental scope for yields to soften significantly from the current juncture is limited on account of two major factors -- front-loaded open market operations by the Reserve Bank of India and global volatility as key events unfold," the agency said.
Ind-Ra further said the 10-year G-sec yield could trade at 6.78-6.89% (6.82% at close on November 4). According to it, the rupee is likely to trade at 66.50/USD-67.30/USD.
Further, adding to the impact of the upcoming US President elections, the report said that both global and domestic markets are likely to be singularly focused on the outcome of US presidential elections, to be held on November 8.
Bansi Madhavani, Analyst, India Ratings and Research, said, "The uncertainties over timeline and modalities of Brexit have kept investors’ sentiments cautious. This is evident in the recent appreciation of Swiss franc and Japanese yen, which are largely viewed by investors as a safe haven to hedge against the US dollar volatilities".