10-year zeroes
The yield curve in the Indian market is almost flat with the difference between the one year and ten year paper less that 100 bps. While this does not reflect the true scenario of the money market in India, it is, I believe a result of lack of a good term structure in the Indian money markets. I have no idea why RBI does not start issuing zeroes of more than one year. With opening up of the insurance sector and a vibrant economy especially the financial sector besides the flurry of activity in M&As requiring money in different forms, I am sure RBI will easily find a good market in zeroes of over one year. With the introduction of the same not only will the market find its true term structure but the same will also help the investors/corporate to design their investments and take advantage of money that they might hold idle otherwise.
