RBI restricting 10-year liquidity to better manage yields: Experts

In declared secondary market operations, through G-SAP or OMOs, the RBI has purchased Rs 41,451 crore of the 10-year paper, out of the outstanding stock of Rs 91,270 crore

The bond market seems to have reconciled with the fact that no matter what the inflation print, the Reserve Bank of India (RBI) will keep the 10-year bond yields below 6 per cent, say experts.

To that effect, the central bank seems to have trained its focus on the 10-year bond, mopping up most of it to create a liquidity shortage in the market of that particular paper. Such constricted liquidity helps drive yields even with relatively lower value of transactions.  

In declared secondary market operations, through government securities acquisition programme (G-SAP) or open market operations (OMOs), the RBI has