Bond yields tumbled after the central bank announced a larger-than-expected buyback auctions after rejecting all bids at Friday's debt sale. The 8.24% bond maturing in 2018 was at 6.37%, compared with its previous close of 6.80%. The central bank said on Friday it would buy back Rs 20000-crore government bonds via auctions this week.
Lower bond yields or higher bond prices (the two are inversely related) will result in appreciation in the value of the bond portfolio of banks.
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