The Reserve Bank of India (RBI) managed to sell around Rs. 11,500 crore (Rs. 11,482 crore) of government bonds of its targeted Rs. 15,000 crore on Friday showing that the panic in bond market has subsided.
Bond markets have been in turmoil since the RBI’s extraordinary move on Monday to support the rupee by draining
“It (bond auction) shows that market participant believe that it (RBI’s steps to tighten liquidity) is a temporary phase,” said Krishnamoorthy Harihar, treasurer, FirstRand Bank India.
Friday’s bond auction came a day after the RBI on Thursday accepted bids worth Rs. 2,532 crore, around one-fifth of the Rs. 12,000 crore worth of bonds it had offered to sell through the open market operations one of steps it announced on Monday.