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Weak Auctions Likely To Pressure Bonds

INR

Bonds expected to come under pressure today. Friday's auctions were poorly received, the RBI didn't accept any bids for the 10-year auction and the sale of shorter maturity bonds was rescued by underwriters. In total investors bought INR 91.5bn of bonds, compared to an initial RBI target of INR 260bn. There was upward pressure on yields in the second half of June as retail inflation remains above the top of the RBI's target band and oil prices continue to rally.

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