• On Friday, the 10-year benchmark government bond (6.48% GS 2035) opened 1bp higher at 6.59% ahead of IGB weekly auction. • Over the day, the 10Y point hardened at 6.62% on profit-booking by market participants. The selling continued after price on the 10-year benchmark 6.48%, 2035 gilt auction came lower than expected. The RBI offered 6.48% GS 2035 at 6.6147%. • However, Indian rupee ended lower at 90.20/$ on month-end dollar demand by importers, kept the 10Y bond yield elevated. • The 10Y point closed 3 bps higher at 6.61% vs 6.58%. • The latest banking system liquidity stands in surplus of ~INR 238.65 Bn. RBI conducted 5-day VRR auction for INR 1000 Bn and was partially subscribed at 5.26%.
