Will consider bond sales to drain liquidity: Subbarao

Says will roll back steps to defend rupee in a 'calibrated' manner

The Reserve Bank of India will consider bond sales to further drain cash and will "only" roll back current steps to defend the currency in "a calibrated" manner when volatility in exchange rates have subsided, Governor Duvvuri Subbarao said on Wednesday.

 

Subbarao added in a conference call with analysts the RBI has refrained from describing its cash-tightening measures as "temporary" to avoid misleading markets as to the planned timing of its actions.

 

The central bank governor added it may consider bond sales via open market operations as part of its cash-tightening measures, sending 10-year bond yields up 5 basis points to 8.31% from levels before the comments.