The market reaction was subdued as the markets had already anticipated a cut in the CRR of at least 50 basis points in the policy review on Thursday, and as traders feared the Reserve Bank of India could for now refrain from more open market operations to buy bonds.

At 9:24 a.m. (0354 GMT), the 10-year benchmark bond yield was at 8.26 percent, down from Friday's close of 8.28 percent.

The RBI lowered the CRR to 4.75 percent effective Saturday, a move which is expected to have injected about 480 billion rupees ($9.63 billion) of liquidity into the banking system.

Traders will await the January industrial output data due around 0530 GMT for clues on growth in Asia's third-largest economy and timing of the likely interest rate cuts from the RBI.

Copyright Reuters, 2012