Friday, July 27, 2007

Indian Bonds Fall; Chidambaram Says Excess Liquidity Poses Inflation Risk

(Bloomberg) -- India's 10-year bonds fell,
reversing gains, after Finance Minister Palaniappan Chidambaram
said there was ``enormous liquidity'' in the market and the
government will ``take all steps'' to curb inflation.

The rate at which banks lend to each other overnight stayed
below 0.5 percent for a third week on speculation the central
bank sold rupees to stem gains in the currency, adding to funds
in the system. The central bank, which will announce its
interest-rate decision on July 31, is fighting inflation that
accelerated to a six-week high in the seven days ended July 14.


Read more at Bloomberg Bonds News

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