Rupee trading stronger on RBI measures

Rupee trading stronger on RBI measures Mumbai: India's benchmark bond yield dropped as much as 10 basis points in opening trade on Thursday after the Reserve Bank of India (RBI) assured it would provide liquidity to the market and also undertake open market operations if necessary.

The benchmark 10-year bond yield was down 11 basis points on the day at 8.68 percent by 0905 India time (0335 GMT).

The partially convertible rupee was trading stronger on the day at 62.23/24 per dollar versus its close of 62.44/45 on Wednesday, after the RBI eased norms for providing swaps to banks that are borrowing funds overseas.

The Reserve Bank of India late on Wednesday relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee.

The Reserve Bank of India said on Wednesday it will take action, including conducting open market operations, to ensure adequate liquidity is available in the banking system, acknowledging that liquidity conditions have been tightening.

Reuters