Nudged by markets, RBI accepts yields at near-market level in OMO

Since August, the central bank has tried to keep the 10-year yields below 6 per cent.

The Reserve Bank of India (RBI) seems to have reconciled to the fact that higher yields are here to stay, as it bought bonds at near-market rates after many months. 

The central bank conducted a special open market operation (OMO), in which it bought Rs 20,000 crore of long-term bonds, maturing between 2025 and 2033, and sold Rs 15,000 crore of bonds maturing between 2021 and 2022. Included in the purchase was the benchmark 10-year bond, which the central bank bought at 6.1778 per cent, and it closed at 6.2469 per cent after the OMO.  

On Wednesday, the RBI also announced another