Thursday, January 17, 2013

Rupee up, benchmark yields down

Benchmark Treasury bill yields fell further at yesterday’s (16) primary market auction while the rupee closed slightly higher against the US dollar.

Opening at Rs. 126.50/60 against the greenback, the rupee lost some ground to non-oil related import demand before offshore inflows strengthened the currency to a close of Rs. 126.40/50, currency dealers said.

The Public Debt Department of the Central Bank issued maturing bills amounting to Rs. 24 billion attracting bids amounting to nearly Rs. 74 billion. Bids accepted amounted to Rs. 34.6 billion.

The three-months Treasury bill yield fell 13bps to 9.75 percent from 9.88 percent last week and the six-months bill fell 23bps to 10.58 percent from 10.81 percent a week earlier. The 12-months bill fell 9bps to 11.26 percent from 11.35 percent a week earlier.

Last month, the Central Bank cut monetary policy rates by 25bps in a surprising move in a bid to spur economic growth this year. But economists point out with the government not planning to borrow from international capital markets this year, domestic borrowings are expected to surge, where lower rates would benefit the government.

In 2010, the Central Bank had warned the government against excessive borrowings and crowding out the private sector for bank credit.

The Central Bank will make its first monetary policy announcement today

source -

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