India pumps in liquidity to ease cash crunch; bond markets rally
Updated : October 01, 2018 11:40:02 IST
The benchmark 10-year bond yield dropped as much as 12 basis points to 7.90 percent in opening deals, its lowest level since Aug. 29. By 0535 GMT however, it was down 7 basis points at 7.95 percent.
The RBI said early on Monday that it has decided to buy a total of Rs 36,000 crore worth of government bonds under its open market operations (OMOs) this month, in a bid to ease liquidity conditions in the market.
The government will effectively cut its market borrowing by Rs 70,000 crore due to higher-than-expected earnings of Rs 75,000 crore through its small savings scheme.