NEW DELHI: India’s key money-market rates and yields on short-term debt rose after the central bank took its first small step toward unwinding emergency pandemic measures.
The weighted interbank call rate rose to 3.44% as against its previous close of 3.18%, while the yield on a five-year bond surged 13 basis points after the Reserve Bank of India (RBI) said it planned to drain liquidity via a reverse repo operation.The announcement is “a clear signal from the central bank that it wants to slowly start the process of exiting from the extraordinary accommodation that remains in place, ” said Kaushik Das, chief economist for India at Deutsche Bank AG. “The central bank wants to nudge the various short-term interest rates to converge to the reverse repo rate gradually.”