After rupee-supporting measures sent bond yields soaring, India's central bank said it plans to step in and buy long-dated government debt. The Reserve Bank of India said liquidity-tightening steps must not "harden longer term yields sharply" and cut into lending. "The long-end yields reacted too much and that was, probably, not the objective. There are other objectives that the RBI has to worry about, like government borrowing costs and the impact on the economy," said Prasanna Ananthasubramanian, an economist at ICICI Securities Primary Dealership in Mumbai.
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