MUMBAI: Indian bonds slumped on Monday, with the benchmark 10-year bond yield up as much as 15 basis points, after the central bank ordered banks to boost cash deposits with it in a bid to absorb excess liquidity generated by a government ban on larger notes.
The benchmark 10-year bond yield was up 8 basis points at 7.31 percent at 0345 GMT, after earlier rising as much as 15 basis points at open, reacting to the Reserve Bank of India's announcement on Saturday.
Banking shares tumbled, with State Bank of India down 2.8 percent.
The RBI will review its decision on the cash reserve ratio (CRR) once the government has issued an adequate amount of market stabilisation scheme bonds to soak up liquidity, Governor Urjit Patel was quoted as telling the Press Trust of India on Sunday.
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