• The 10-year benchmark government bond (6.48% GS 2035) opened flat at 6.70% ahead of IGB weekly auction. • The 10Y point rose to 6.72% level on short-selling, however, the bond prices recovered most losses and after the RBI announced a second 90-day variable rate repo (VRR) auction of a large, notified size of INR 2 trln. • However, Indian rupee depreciated to close at 91.98/$, just shy of the psychologically crucial 92/$ level, on persistent dollar purchases by banks on behalf of importers and foreign portfolio investors. • The 10Y point closed 2 bps higher at 6.66% vs 6.64%. • The latest banking system liquidity stands in surplus of ~INR 829.67 Bn.
