RBI's silence on bond purchases may have left traders disenchanted

The RBI held the repurchase rate at 4 per cent, as it chose to wait for inflation to cool before adding to steps aimed at supporting a fragile economy

For the most part, Indian sovereign bonds had priced in the central bank holding rates. It was the absence of guidance on debt purchases and the extent of the economic slowdown that left traders disappointed.
 

The yield on most-traded 5.79 per cent 2030 notes rose four basis points to 5.86 per cent, after climbing as high as 5.89 per cent, following the Reserve Bank of India’s decision Thursday to keep the key policy rate unchanged at a record low. The yield on 6.19 per cent 2034 bonds also gained four basis points, and the rupee was steady.
 

The RBI held