Trading bands for govt bonds removed for Tuesday

The trading band for government bonds has been removed for Tuesday, the Fixed Income Money Market and Derivatives Association of India, or FIMMDA, said on its website.

The move is likely in anticipation of a spike in Indian bond yields after the Reserve Bank of India late on Monday announced measures to manage volatility in the rupee, including lifting two interest rates by 200 basis points each and a planned sale of 120 billion rupees of government bonds on July 18, dealers said.

Usually, government bonds have a trading band of 15, 10 and 7.5 basis points depending on maturity.

The benchmark 10-year government bond yield closed at 7.55% on Monday.