Gilt yields decline on likely Fed cut
Gilt yields decline on likely Fed cut Gilt yields fell on September 18, on expectations that Federal Reserve will announce a cut of 25 basis points on interest rates. The sentiments of the investors moved with optimism that there will be Fed Reserve cut on interest rate which will in turn make the bond market attractive. The demand of gilt, as a result was high. It seemed that there is enough liquidity in the debt market with the yield dropping. But on the other hand, the overnight call rates were high at 7.50%, as corporates have to pay advance taxes. The Reserve Bank of India (RBI) absorbed Rs 33.20 billion via 1-day reverse repos on Sep. 18, 2007. The benchmark yield on the 10-year bond ended at 7.85% down a point from Monday`s close of 7.86%.
