By -
Jun 11, 2014
Indian government bonds due 2023
fell for a third day on concern inadequate rains will curtail
farm output and drive food prices higher.
The monsoon, the main source of water for the nation’s 263 million farmers, will be 93 percent of a 50-year average of 89 centimeters (35 inches), down from an April forecast of 95 percent, the India Meteorological Department said June 9. Ten-year bonds rallied last week, with the yield slumping 13 basis points to 8.51 percent, after the central bank said it could ease policy should inflation slow more than anticipated.
“There are concerns that a weaker rainy season will push up food prices,” Debendra Kumar Dash, a fixed-income trader at DCB Bank Ltd. in Mumbai, said by phone. “Markets were due to consolidate after last week’s rally and the worries around inflation have given them a reason to do that.”
The yield on the 8.83 percent notes due November 2023 rose two basis points, or 0.02 percentage point, to 8.58 percent as of 10:04 a.m. in Mumbai, prices from the central bank’s trading system show. It climbed five basis points in the past two days.
India will issue data on consumer prices for May tomorrow and wholesale-price inflation figures on June 16. Reserve Bank of India Governor Raghuram Rajan, who has raised the benchmark repurchase rate by 75 basis points since taking charge in September, left it unchanged at 8 percent for a second straight meeting on June 3.
The RBI aims to curb consumer-price gains, which were 8.59 percent in April, to 8 percent by January 2015 and 6 percent a year later. A drought in India’s main agricultural regions may hamper efforts to revive economic growth and control prices.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, rose two basis points to 8.26 percent, data compiled by Bloomberg show. The contracts slumped 22 basis points last week to the lowest level since July 2013.
To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
The monsoon, the main source of water for the nation’s 263 million farmers, will be 93 percent of a 50-year average of 89 centimeters (35 inches), down from an April forecast of 95 percent, the India Meteorological Department said June 9. Ten-year bonds rallied last week, with the yield slumping 13 basis points to 8.51 percent, after the central bank said it could ease policy should inflation slow more than anticipated.
“There are concerns that a weaker rainy season will push up food prices,” Debendra Kumar Dash, a fixed-income trader at DCB Bank Ltd. in Mumbai, said by phone. “Markets were due to consolidate after last week’s rally and the worries around inflation have given them a reason to do that.”
The yield on the 8.83 percent notes due November 2023 rose two basis points, or 0.02 percentage point, to 8.58 percent as of 10:04 a.m. in Mumbai, prices from the central bank’s trading system show. It climbed five basis points in the past two days.
India will issue data on consumer prices for May tomorrow and wholesale-price inflation figures on June 16. Reserve Bank of India Governor Raghuram Rajan, who has raised the benchmark repurchase rate by 75 basis points since taking charge in September, left it unchanged at 8 percent for a second straight meeting on June 3.
The RBI aims to curb consumer-price gains, which were 8.59 percent in April, to 8 percent by January 2015 and 6 percent a year later. A drought in India’s main agricultural regions may hamper efforts to revive economic growth and control prices.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, rose two basis points to 8.26 percent, data compiled by Bloomberg show. The contracts slumped 22 basis points last week to the lowest level since July 2013.
To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
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