We experimentally and theoretically study phase coherence in two-component Bose-Einstein condensates of ^{87}Rb atoms on an atom chip. Using Ramsey interferometry we determine the temporal decay of coherence between the |F=1,m_{F}=-1⟩ and |F=2,m_{F}=+1⟩ hyperfine ground states. We observe that the coherence is limited by random collisional phase shifts due to the stochastic nature of atom loss.
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