A higher inflation will leave little room for the Reserve Bank of India (RBI) to continue its ultra-accommodative monetary policy for long. Meanwhile, the central bank on Monday announced two open market bond purchases under the second round of the government securities acquisition programme (G-SAP). But the RBI's decision to purchase lliquid stocks on Thursday under the G-SAP disappointed the bond market. The 5-year bond yield also surged 7 basis points while 2-year bond yield advanced 5 basis points. The minutes of the latest meeting of the central bank's Monetary Policy Committee were overall dovish and highlighted the predominance of growth concerns, consistent with the tone and action of the actual monetary policy review earlier in the month.

Source: Mint July 06, 2021 07:41 UTC