| Debt market players interpreted this as a clear signal that the central bank might not go in for an interest rate hike during the quarterly review of the monetary policy in July. |
| "It is clear that the RBI's discomfort with the inflation rate has gone. One can expect the central bank not to go in for rate rise in the near future," said a senior banker. |
| The RBI has hiked the the reverse repo rate from 4.5 per cent to 5 per cent in two stages since October last year. |
| Speaking to delegates at the eighth meeting of the Bank for International Settlements (BIS) Working Party on Monetary Policy in Asia, which took place for the first time in India, Reddy also said India had built resilience to shocks and was less vulnerable to output volatility. |
| "None of the factors that triggered a rate rise in April exist today. We expect the inflation rate to go down to 3.71 per cent by September," said the treasury head of a PSU bank. The latest inflation figure rests at 5.38 per cent and market watchers expect it to touch the 4.25 per cent levels this month. |
| Interestingly, the debt markets today touched an almost one-year high in terms of trading volumes touching the Rs 7,000 crore mark as against the recent average daily of Rs 2,000-2,500 crore. |
| The rise in prices by as much as 65-75 paise from yesterday's levels was, however, not connected to Reddy's statements, said dealers. The 8.07 per cent 2017 paper touched a high of Rs 108.90 today as compared to yesterday's close of Rs 108.15. |
| The volume driven rally, not seen since December 2004, was a market reaction to Monday's auction. |
| The 7.37 per cent 2014 paper, which was auctioned yesterday, was the most heavily traded paper today with volumes of Rs 2,500 crore clocked in it alone. |
| Liquidity in the stock created due to the Rs 6,000 crore auction on Monday encouraged several players like primary dealers, banks including nationalised banks and mutual funds to trade in the market. |
| Several players were sitting light and they jumped in to buy today, said the chief dealer in a foreign primary dealership. |
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