 "Liquidity management tool: RBI may have to balance old norms with the new")
Indian bond traders who were expecting the central bank to keep the cash spigot open may have to rework their calculations.
The Reserve Bank of India will hold a reverse repo auction of Rs 250 billion of 63-day duration on Wednesday, the first such move to use the tool for a longer duration to drain cash. It will hold additional rounds if needed, the central bank said late Tuesday evening.
“The market will read it as no open-market operations by the RBI for now,” said Naveen Singh, head of fixed-income trading at ICICI Securities Primary Dealership in Mumbai.
While the
