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Bonds slump after RBI cuts SLR by 50 bps

The RBI said it would reduce banks' statutory liquidity ratio by 50 bps to 19.5 percent

Reuters  |  MUMBAI 

India's bonds slumped on Wednesday, sending yield sharply higher, after the Reserve Bank of India (RBI) cut the statutory liquidity ratio, or the amount of bonds banks must set aside with the central bank, by 50 bps to 19.50 percent from mid-October. The decision, announced at the same time the RBI kept the repo rate unchanged at 6.00 percent, is meant to spur banks into lending more, but it would mean increased supply at a time of ample liquidity. The RBI said it would reduce banks' statutory liquidity ratio by 50 bps to 19.5 percent from the fortnight starting Oct. ...

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First Published: Wed, October 04 2017. 16:02 IST
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