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RBI buys bonds as Iran war threatens economic outlook

Economists expect central bank to stay on hold, despite risk of higher inflation and lower growth

Reserve Bank of India headquarters

India’s central bank has intervened to cap rising bond yields amid the ongoing fallout from the conflict in the Middle East. 

The Reserve Bank of India (RBI) conducted open market operations worth 500 billion rupees ($5.4 billion) on March 9 as the US and Israel continued their co-ordinated strikes on Iran and the Islamic republic launched attacks on countries across the Gulf. The RBI said it would conduct open market operations worth the same amount on March 13.

DBS economist Radhika Rao said in

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