Read more about Sovereign bonds in India signal growing doubts on RBI s easy policy stance on Business Standard. The inflation shock is adding to uncertainty on whether the central bank would stick to its pledge of keeping policy accommodative to support growth after economy was battered by a deadly Covid wave
(Bloomberg) A spike in inflation reading this week has revived debate among sovereign bond traders in India over how long the central bank could retain its dovish policy stance.
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RBI faces key auction as traders balk at yields
SECTIONS
Last Updated: Apr 22, 2021, 07:13 AM IST
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Synopsis
Underwriters were forced to rescue a five-year bond sale on April 9 and the RBI canceled an offering altogether on April 16.
The Reserve Bank of India’s explicit assurance to buy 1 trillion rupees ($13 billion) of bonds this quarter has failed to encourage more purchases by traders.
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By Subhadip Sircar
Barely weeks into India’s new borrowing program, the nation’s sovereign bond traders and the central bank are shaping up for a third bruising battle.
The Reserve Bank of India’s explicit assurance to buy 1 trillion rupees ($13 billion) of bonds this quarter has failed to encourage more purchases by traders. Underwriters were forced to rescue a five-year bond sale on April 9 and the RBI canceled an offering altogether on April 16 when traders demanded higher yields for benchmark 10-year debt.