In the case of 12.32 per cent GOI2011, the price appreciation was around 80 paise to Rs 112.50 while the price appreciation for 12.00 per cent GOI 2008 was around 50 paise to Rs 110. Yield based auction of 12 and 20 year paper on May 29. In tune with market demand, RBI announced the yield based auction of 12 and 20 year paper for Rs 3000 crore and Rs 2000 crore respectively . The auction would be held on May 29. With these issues, government would be completing Rs 40,000 crore of its borrowing constituting around 34 per cent of the gross budgeted borrowing of the fiscal.
Liquidity is comfortable in the system and undertone in the market is bullish.
The yields on a 10-year benchmark has fallen to around 9.82 per cent. Foreign exchange reserves are comfortable and the rupee is stable. Credit offtake of banks is not expected to be large with slowdown of industrial production. With slowing down of the US economy, Federal Reserve is again expected to have a softening bias and effect further interest cuts. Further, with declining global interest rates, corporates are accessing ECB loans.