Short-term government bonds lagged demand for longer-term securities this month due to a liquidity crisis in the banking system and expectations of a delay in interest rate cuts, market participants said.
Investors have favored longer-term government bonds, or g-secs, with insurance companies and pension funds leading the way by stocking up on bonds with maturities of 30 years and longer.
The preference for longer-term securities was reinforced by the completion of the lending program on Friday, forcing institutional investors to meet their needs on the secondary market.
While banks prefer shorter terms
First print: February 19, 2024 | 11:55 PM IST