Reuters Market Eye - * Dealers in India will be allowed to trade bonds even when the RBI is making coupon payments for that debt, in a rule that is expected improve market liquidity on those days, dealers say.
* Under the previous rule, bonds whose coupon payments were due were placed in a one-day "shut period", meaning traders were not allowed to trade them on the day before the coupon payment so as to avoid any change in ownership of those securities during the process.
* However, the one-day shut period will continue to apply to bond redemption.
* "The shut period was an operational issue for banks. The removal is not likely to be so impactful, but will still be good for liquidity," said Harish Agarwal, a fixed income dealer with First Rand Bank.
(swati.bhat@thomsonreuters.com/; swati.bhat.thomsonreuters.com@reuters.net)
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