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Mumbai, Sept 8: The Reserve Bank of India launched aggressive open-market operations (OMOs) on Tuesday by hiking the yields on four securities in its sale list. The RBI has also indicated that it will soon put out the 364-day treasury bills and other short-term securities list to sterilise the impact of the Resurgent India Bonds proceeds. The central bank has about Rs 11,000 crore on its books through these securities.
The RBI changed the yield curve in the medium to long term through the sale list by jacking up yields, analysts said. The yields are, however, slightly lower than the secondary market yields of similar dated securities.
The central bank brought down the price of the 11.95 per cent gilt maturing in 2004 to Rs 100 from Rs 100.33 set in the previous sale list put out on September 1. The yield of the security works out to 11.94 per cent while in the secondary market the security is trading at 11.98 per cent yield. The central bank has Rs 230 crore of this security on its books.
The secondsecurity put out is the 11.19 per cent gilt maturing in 2005. The price of this security has been brought down to 96.15 from the previous sale price of Rs 96.41. The current yield being offered by the RBI works out to 12.02 per cent. The RBI holds about Rs 4,600 crore of this security on its books.
The 11.75 per cent gilt maturing in 2006 has been priced at Rs 98.40 -- down by 20 paise over its previous price in the sale list. The yield of the security works out to 12.07 per cent and the RBI has Rs 5,000 crore of this security on its books.
The 12.15 per cent gilt maturing in 2008 has been priced at Rs 99.71, indicating an yield of 12.20 per cent. The earlier price was Rs 99.933 and the RBI has Rs 1,900 crore worth of this stock on its books.
The RBI has reduced monetised deficit through the OMOs, analysts said. The central bank has made net open-market operations to the tune of Rs 8,448 crore between April and August.
As a result, the net RBI credit to the centre has been reduced from its peak levelof Rs 21,789 crore on July 10 to Rs 6,163 crore on August 28, showing a reduction of Rs 15,626 crore. The RBI gilt holdings during the current financial has come down from a high of Rs 11,690 crore on July 24 to Rs 5,469 crore on August 28.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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