The trading band for government bonds has been removed for Friday, the Fixed Income Money Market and Derivatives Association of India, or FIMMDA, said on its website, for a fourth day in a row after the Reserve Bank of India (RBI) announced measures to curb the rupee's decline.
The RBI on Monday raised short-term borrowing costs, restricted funds available to banks and said it would sell Rs 12,000 crore in bonds, effectively draining cash from the market, to protect a rupee that had hit a record low last week.
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 7.99% on Thursday.