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Bond markets rally as salute to Rajan's last monetary policy

RBI Governor says if the central bank sees stress in currency market, it will take a call on infusing liquidity in the foreign exchange markets

Reserve Bank of India (RBI) Governor Raghuram Rajan arrives to attend a news conference at the RBI headquarters in Mumbai
Reserve Bank of India (RBI) Governor Raghuram Rajan arrives to attend a news conference at the RBI headquarters in Mumbai

Giving a thumbs-up to the Reserve Bank decision to keep the system flush with liquidity and maintain an accommodative monetary policy stance, the yield on benchmark government paper (10-year bonds) eased by five basis points (bps) to a three-year low of 7.12 per cent.    Bond dealers and treasury executives said this was a most positive aspect of the policy stance, to be open for reducing the policy rate further and to continue to inject money in the system to ward off the expected crunch when FCNR (B) deposits are redeemed over the next few months. On this issues, of a ...