Trading bands for government bonds removed for Friday

The trading band for government bonds has been removed for Friday, the Fixed Income Money Market and Derivatives Association of India, or FIMMDA, said on its website, for a fourth day in a row after the Reserve Bank of India (RBI) announced measures to curb the rupee's decline.

The RBI on Monday raised short-term borrowing costs, restricted funds available to banks and said it would sell Rs. 12,000 crore in bonds, effectively draining cash from the market, to protect a rupee that had hit a record low last week.

Usually, government bonds have a trading band of 15, 10 and 7.5 basis points depending on maturity.

The benchmark 10-year government bond yield closed at 7.99 per cent on Thursday.

Copyright: Thomson Reuters 2013