With the RBI unable to cut rates due to persistent inflation pressure, tension between traders and the central bank kept building as auctions were scrapped and market participants pushed for a formal bond-purchase plan.
MUMBAI: The Reserve Bank of India’s (RBI) pledge to buy as much as 1 trillion rupees (US$13.4bil or RM55.45bil) of bonds this quarter has sent a wave of relief through the sovereign debt market. However, some say the move may be insufficient in the face of the nation’s near-record borrowing plan.
India’s benchmark 10-year bond yield extended its decline to 6.01% after posting its biggest intraday drop in two months on Wednesday following RBI’s explicit assurance of debt purchases.
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