Desperate money measures

Indian policymakers seem to be sufficiently worried about the liquidity crunch in the domestic money market to make two announcements in quick succession. The Reserve Bank of India (RBI) said on Wednesday that it would buy government bonds for the first time this fiscal through what are known as open market operations. The government said on Thursday that foreign institutional investors will be able to invest an extra $5 billion in government bonds and another $5 billion in corporate bonds.

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