India’s central bank said on Thursday open market operations in the bond market were a monetary policy tool for the Reserve Bank of India (RBI), and not a debt management instrument. Top officials at the RBI also said open market operations were not being used to influence bond yields.

The bond yield curve was reflecting the inflation expectations and there was no need to revisit the statutory liquidity ratio, Deputy Governor Subir Gokarn said.

Gokarn was addressing reporters after the RBI raised its key borrowing and lending rates by 25 basis points each to tame inflation on Tuesday.

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