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Narrowing bond yields signal liquidity squeeze in markets, shows data

Spread between 10-yr G-sec and 2-yr bond yields narrows to 38-mth low

Topics
Reserve Bank of India | India bond market | bond-market liquidity

Krishna Kant  |  Mumbai 

markets
The decline in liquidity is attributed to factors such as decline in foreign exchange reserves, advance tax payments by corporates and a much faster growth in bank credit compared to deposits

are signalling tightening and a slowdown in the economy, as shown by a sharp rise in yields on short-term bonds, resulting in the spread between those and the rates on long-term bonds narrowing.

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First Published: Tue, September 20 2022. 22:50 IST
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