April 23, 2020 / 11:22 AM / a month ago

India bonds see biggest single-day rally in nearly 6 mnths on RBI special OMO

MUMBAI, April 23 (Reuters) - The Reserve Bank of India on Thursday announced another round of “Operation Twist” via the simultaneous sale and purchase of securities, a measure which helped bonds snap a two-day fall, and see its biggest single-day rally in nearly six months.

The RBI said it will buy four bonds including the 7.59% 2026, 7.17% 2028, 7.26% 2029 and 7.61% 2030 bonds at the open market operation (OMO) while it will sell short-term cash management bills and treasury bills.

The benchmark 10-year bond yield dropped as much as 21 basis points on the day to 6.01% after the announcement. It ended down 16 bps at 6.06%, its biggest single-day fall since Nov. 1 when it dropped 19 bps.

Traders said the treasury bills on sale at the OMO were likely bought by the central bank at the auction earlier in the week. Market participants said the OMO has however raised expectations for more support from the RBI in the coming weeks. (Reporting by Swati Bhat, Editing by William Maclean)

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