MUMBAI: Indian government bonds jumped on Wednesday, with the benchmark bond yield marking its biggest single session plunge in seven months after the central bank eased supply concerns by announcing a hefty liquidity injection for the coming month. The benchmark 10-year yield ended at 6.5398%, after closing at 6.6328% on Tuesday, dropping the most in a single session since May 13. Bond yields move inversely to prices. The Reserve Bank of India will infuse about 2.90 trillion rupees ($32.42 billion) into the banking system through 2 trillion rupees of open market bond purchases and a $10 billion three-year dollar-rupee buy/sell swap between Dec. 29 and Jan. 22. “The move was not surprising, given the level of foreign exchange intervention they appear to have done in recent weeks, draining durable liquidity,” said Madhavi Arora, chief economist at Emkay Global Financial. “If FX pain continues, the liquidity drain could be significant, and thus a proactive RBI on liquidity infusion is a welcome move.” The central bank has already bought 1 trillion rupees of bonds and conducted a $5 billion foreign exchange swap in December. Over 2025, the RBI has bought bonds worth 6.5 trillion rupees, a record high, and infused another 4.7 trillion rupees through FX swaps and slashing the cash reserve ratio for banks. The liquidity measures follow a period in which market participants had become wary of elevated issuance, pushing up the government’s borrowing costs, with analysts estimating aggregate debt supply of about 8.1 trillion rupees in the next quarter. RATES India’s overnight index swap rates dropped across the curve tracking a fall in bond yields and improved confidence after RBI announced its liquidity infusion plan. The one-year OIS rate ended at 5.46%, while the two-year OIS rate ended at 5.54%. The five-year OIS rate eased 5 bps to settle at 5.9075%.