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Bond yields dropped sharply on Monday after the Reserve Bank of India said that it has decided to buy Rs 36,000 crore worth government bonds under its open market operations (OMOs) this month, in a bid to ease liquidity conditions in the market.
The central bank said the auctions would be conducted during the second, third and fourth week of October. It said the OMO amount stated is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions.
The rupee opened at 72.60 against the previous close of 72.54. Benchmark 10-year bond yield dropped below 8 per cent for the first time since September 4. Benchmark 10-year bond yield dropped to 7.90 per cent in early trade against the previous close of 8.02 per cent.
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