Tough call: A cyclist rides along an empty street past the Reserve Bank of India headquarters in Mumbai. Unlike other central banks, the RBI is seeking to tame borrowing costs without a quantitative easing programme or yield-curve control. ─ Bloomberg
MUMBAI: Traders in India are once again testing the central bank’s pledge to support the government’s massive borrowings.
The tension is showing up in the benchmark 10-year bond as its yield keeps breaching 6%, a level that’s seen as a line in the sand for the Reserve Bank of India (RBI). A near-record debt sale plan and concerns over fewer liquidity measures are spooking traders.
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