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Jittery bond traders constrain RBI's liquidity management options
As bond traders pore over the Indian central bank's every action after a recent rise in yields, policymakers are being forced to use their liquidity tools more cautiously to avoid triggering outsized market reactions, sources and traders said. The Reserve Bank of India, having repeatedly assured markets and the banking sector of comfortable liquidity conditions, has maintained an average cash surplus of over 2.5 trillion rupees ($27.07 billion) or 1 per cent of deposits since February. [...]