Business Line Article

Dear Sir,

There is something related to the monetory phenomenon that I have read in the Business Line. The article talks about the effects of monetory tightening on short term yeilds. I am not very sure on my understanding of the same.

The article says - "“The short term yields having spiked in the month of August following a slew of policy measures including the hike in CRR to 7 per cent, the removal of cap in reverse repo volumes, the hike in limit of MSS issuances to Rs 1,50,000 crores and restriction of ECBs that only up to $20 million could be brought into the country”

My Question: Why should short term yeilds spike following monetory tightening?

Although I have a vague idea, I am not sure about it.

Here is the link to the article - http://www.thehindubusinessline.com/2007/08/29/stories/2007082952411300.htm