Bonds gain after RBI relaxes foreign investment rules

MUMBAI (Reuters) - Indian bonds gained on Wednesday morning after the central bank relaxed investment rules for foreign investors in debt by allowing them to invest in short-term treasury bills issued by the central government.

Last week the Reserve Bank of India withdrew a restriction that allowed foreign portfolio investors to invest in corporate and government debt with tenures of three years or more.

The benchmark 10-year bond yield was down 5 basis points at 7.72 percent by 0337 GMT.

The partially convertible rupee was flat at 66.66 per dollar after falling to a low of 66.75 in initial trades.

(Reporting by Swati Bhat; Editing by Gopakumar Warrier)