The Reserve Bank of India (RBI) has bought Rs100 billion worth of bonds from the secondary market under its open market operations (OMO) programme.
This was the second OMO purchase this year, and something that the market was widely expecting, considering the banking liquidity reducing to neutral levels. OMOs infuse durable liquidity in the banking system.
The OMO helped cool off yields further, having been falling since Monday when the OMOs were first announced. The 10-year bond yields closed at 7.77 per cent, down from it previous close of 7.83 per cent.
Minutes of the monetary policy also did not point out specifically to any hike immediately. The mildly hawkish language of the minutes helped cool off market fear too about imminent rate hikes, bond dealers said.