Mumbai: The swap rates rose in an illiquid market on Thursday with only two trades reported on the Reserve Bank of India’s (RBI) electronic platform, as trading in federal bonds was halted due to technical snags.
Trading on the electronic bond trading platform broke down because of technical problems on Thursday, forcing some banks to resort to the telephone market to execute orders and hitting volumes in other parts of the market.
“When the underlying has become so illiquid, how can one trade swaps?” asked Gopal Tripathi, a fixed-income dealer at HDFC Bank in Mumbai.
Swap rates typically take cues from bond yields.
Volume was a paltry Rs750 million compared with an average Rs10-15 billion, traders said.
At 3:45pm, the benchmark 5-year swap was at 4.90/4.95% from its Wednesday’s close of 4.79/7.85%.