MARKET TALK: India Bonds Rise On BuyBack, CRR Cut Expectations

Indian government bonds are higher after RBI Deputy Governor Subir Gokarn says bond buybacks remain an option to manage liquidity, adding that a further cut in banks' cash reserve ratio is possible, two dealers say. The benchmark 8.79% 2021 bond is at 104.04 vs 103.94 before Gokarn's comments and from 103.98 at Friday's close. "The market is now hopeful that the RBI will conduct a bond buyback later this week to ease the liquidity crunch. While the RBI talks about buybacks there is uncertainty about how much and when the buybacks will happen," says a dealer with a state-run bank. Gokarn says no calendar for bond buybacks will be announced. The state-run bank dealer tips the benchmark yield in a 8.15%-8.20% band for the rest of the session; the yield is at 8.18%