Indian bond yields hardened last month, as RBI refrained from cutting policy rates due to higher CPI inflation readings. Even though this was on the expected lines, markets were disappointed, as they has some expectations, like an increase in the held-to-maturity (HTM) limits for banks, the calendar of open market operations (OMO) and Operation Twist. In the minutes of the monetary policy meeting, views of MPC members indicated a reluctance to cut rates due to CPI inflation readings going above the 6% level for last six months.
