(Photo: Reuters / Danish Siddiqui)
The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai Nov. 2, 2010.
Indian swap rates fell while the rupee strengthened after the central bank cut interest rates by 25 basis points as expected, while also delivering a surprise cut in the cash reserve ratio.
The 1-year overnight index swap (OIS) rate, which is also sensitive to liquidity conditions, fell 5 basis points (bps) to 7.54 percent from levels before the decision. The 5-year OIS rate fell 3 bps to 7.14 percent, according to traders.
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The Indian rupee strengthened to 53.79 from around 53.84 before the decision, while the NSE's banking sub-index was up 0.3 percent.
The 10-year bond yield was down 1 bp as the cut in the cash reserve ratio reduced the prospects of bond purchases via open market operations.
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