Bond Market Recovers On Liquidity Easing; Bond Yield At 7.402%

As against yesterday's eight-month low yield on G-securities of 7.41%, the bond yield in Thursday's trade continues to hover lower at 7.402%. The yield on 10-year G-securities closed higher at 7.53% on Tuesday.

The momentum continues on liquidity softening measures which has already being restored through the refinancing of commercial papers or CPs worth Rs. 1.5 lakh issued by the non-banking finance companies. Also, there has been an assertion made by the newly appointed RBI governor that the autonomy of the central bank shall be maintained.

The RBI saw an overall liquidity adjustment facility (LAF) transaction of Rs. 9,092 crore on Wednesday. Also in the week that ended December 7, 2018, the deficit in average liquidity reduced to seven week low.

Other liquidity measures include the RBI's open market operations which are scaling up liquidity in the already liquidity-hit banking system.

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