Gilt yields low as inflation further declines
Gilt yields low as inflation further declines Gilt yields fell as inflation declined further, which excited the sentiments of traders. There was surplus liquidity in the system, as central bank intervened in the banking system to curb Rupee from appreciating which in increased the cash in the banking system. Further, center will auction market stabilization scheme (MSS), `5.87 % Government Stock 2010` for Rs 40 billion and 11.30 % Government Stock 2010` for Rs 30 billion to be sold (re-issued) through a price based auction using multiple price method. MSS bonds are used to absorb excess liquidity in the banking system. Sentiments of the investors also got affected on speculation that in order to suck liquidity from the market, the apex bank may hike the cash reserve ratio. The benchmark 10-year bond yield ended at 7.90%, down from previous day`s (Thursday) close of 7.91%.
