The Reserve Bank of India (RBI) infusing long-term liquidity worth $5 billion into the system will be positive for corporate bonds, said Ananth Narayan, Professor at SP Jain Institute of Management and Research (SPJIMR), in an interview with CNBC-TV18 on Thursday.

The central bank will inject long-term liquidity worth $5 billion into the system through a foreign exchange swap arrangement with banks for three years.

“So far it was using open market operations, purchase of bonds. It was also doing long-term repos in order to inject short-term liquidity. This is a 3-year window for somewhat longer-term liquidity to be infused without necessarily touching the bond market directly,” he said.

“One could see the longer end of the bond curve going up in terms of yields," he added.