RBI hits out at bond vigilantes for risking 'nascent' recovery

In its state of the economy report, the central bank urged the local investors to help it ensure an 'orderly evolution of the yield curve'

The Reserve Bank of India (RBI) on Friday said bond markets across the world were hampering the nascent recovery, and urged local investors to help the central bank to ensure an “orderly evolution of the yield curve”.

“As countries rush to inoculate their populations, the global economy should regain lost momentum in Q2. Bond vigilantes could, however, undermine the recovery, unsettle financial markets, and trigger capital outflows from emerging markets,” wrote the RBI in its State of the Economy report for the March bulletin.  

For the Indian bond market, in particular, the report said: “The Reserve Bank is striving to