Virus ravaged: Labourers push a trolley at the Howrah railway station in Kolkata. The Indian economy has suffered its worst quarterly contraction on record, with the government out to sell 12 trillion rupees of debt. — AFP
MUMBAI: Sovereign bonds in India rallied after the central bank stepped up measures to crack down on rising yields following a series of weak debt auctions.
The 10-year government bond yield plunged 16 basis points (bps), the most since May 13, to 5.95%.
The rupee also rallied more than 1%, and was the best performer in Asia, after the Reserve Bank of India (RBI) said that a stronger currency will curb imported inflation.
After weeks of increasingly strident calls from traders for the RBI to act, the central bank on Monday said it will conduct 1.2 trillion rupees (US$16.3bil) worth of repurchase operations and Federal Reserve-style Operation Twists, while relaxing rules on bank ownership of debt. Benchmark bonds had their worst sell-off in more than two years in August after a spike in inflation.
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