RBI rejects 10-year bids, leaving short sellers scrambling for cover
The Reserve Bank of India (RBI) on Friday refused to sell the benchmark 10-year bonds in its auction, and also decided not to devolve the securities on the primary dealers, rapidly cooling off yields in the market.
The 10-year bond yields had risen on Thursday after the RBI’s G-Sec purchase of Rs 25,000 crore. In that auction, the RBI had also bought Rs 7,500 crore of 10-year bonds.
However, after the G-SAP, the 10-year bond yields had shot up from 6.01 per cent to 6.13 per cent. It was suspected…