RBI intent to check yields, bat for stronger rupee sparks bond market rally

Rupee closes at 72.87 a dollar, up 1.03% from previous close of 73.62. The 10-year bond yields shed 18 bps to close at 5.942 per cent from previous close of 6.117 per cent

The Reserve Bank of India’s (RBI) resolve to keep bond yields under check and the loud signal emitted in favour of a stronger rupee swiftly translated into rallies in the bond and currency markets on Tuesday.

The rupee closed at 72.87 a dollar, up 1.03 per cent from its previous close of 73.62. The 10-year bond yields fell 18 basis points to close at 5.942 per cent from its previous close of 6.117 per cent. 

While announcing the bond market related measures on Monday post market hours, the central bank had observed that the “recent appreciation of the rupee is